How Verizon Is Losing Money on the iPhone

No business would lose money on purpose.

Oh sorry, SOLYNDRA!

This article is very confusing on a subject that is pretty simple. Verizon never loses money on the IPhone, it simply pays up front costs for the rights to long term contracts. Sure if you want to be short sighted and look at the P&L in only one quarter, particularly the biggest quarter of a year, it may look like a potential loser....But, the annuity value of the Iphone to Verizon over the longer term, and net of upfront costs, is a huge winner. Unfortunately, Wall Street is fixated on short term (and I mean one quarter at a time) performance. If companies were run the way Wall Street likes to analyze them, they could strike the phrase "going concern" out of all the Financial textbooks ever written.

they'll make them back in data plans

My Motorola Razr is still working just fine. I talk and text for less than $50 a month.
Keep on buying them high priced things and paying out all that money every month to look at them little screens and stuff.

Sounds like an excuse to raise their rates!!! They are not losing money off of the iphones! They are just paying certain costs upfront and are using that to make it look llike they are taking a major lose.... How pitiful these phone companies are!!!!!

ok rebecca.. ppl pay you to come up with this, will your boss hire me? i'll take 1/2 your pay LOL.. 1st. do some freakin research before writing .. let me give you some insight .. cost of the iphone to verizon ( maybe $400 per phone ) when i go sign a 2yr contract with verizon ( which is the only way to get a iphone )i must agree to a data plan that runs $30 per month ( which you can take off after 6months but verizon will not let the consumer use a smart phone without data ) so you want a smart phone you must have data even if you dont use it at all.... ( why don't you write about that )back on topic.. to own an iphone on verizon iphone4 16g We start by paying $199.99 + tax on the retail cost which is $599.99lets see $199.99 + $54 tax + $35 activation fee + $80 for 450 mins and data ( oh if you a text option its 250 for $5 + prorate of billing $40 or so = lets see $250 to start your 1st bill $180 or so after taxes and a monthly bill of $85 x23 = holy #$%$ verizon is losing money my a$$total cost for consumer to own an iphone 4g 16g is cost of phone and 1st month alone is $434 + $1955 for the 2yr plan = grand total $2389 and thats using simple mathwhere in the world doyou see verizon losing moneybtw you can reply to this if you read up on your comments (which I doubt you do )thanks for readingmike

Someone should point out that the company still made a lot of money. just not at much as they hoped. It is not in the red, just not as black. This is common to many businesses but our greed tells it to us as a sad story.

So NOW we know the truth behind that little extra they tried to bill everyone. So, the rest of us are supposed to subsidize the iPhone idiots? Thank Verizon. Getting closer to dropping you.

I despise large corporations, monopolies or quasi-monopolies and Verizon the is number one and three and trying to be number two. Someday a judge somewhere will do to them what they did to the old Bell Telephone company. The precedent has already been set.

Verizon charged me $250 for a basic phone. Thanks Verizon

they wanted to charge 2 dollars for payment methods a short time ago and the people were outraged so they overturned that decision.....now since they cant do the 2 dollar increase they want to do a different kind of increase. nice scam!!!! if they try to raise everyone another way i will cancel 3 work numbers and 2 private lines!!! SAY NO FOR BEING BENT OVER BY BIG BUSINESS!!!

poor verizon

LOl, this is so funny. Verizon isn't losing money from subsidizing the iPhone. The lost revenue is coming from heavily marketing 4G service and the additional costs that were involved in facilitating such technology. You also have to pay a different price for 4G service than normal data service for a non 4G device. If your customers opt to not purchase 4G devices because of the higher fees, you can't blame the costs on the iPhone subsidizing.
If this was the case, then At&T would be bankrupt.

thats a crap the never lose money upgrade fees text those example cost nothing its 100% profit not to mention other fees network date which is not even unlimited

I'm sure the CEO will still receive a hefty salary and a nice bonus

this is like the government paying the public to buy the chevy volt.
you can't keep coming out every other month with a new i-phone and
expecting the public to buy into giminatry.they are realising money is harder
to come buy, and buying another i-phone isn't in there expenditures.

With such a small screen, a poor camera, and no 4g which is really hot with LTe, Samsung, HTC and Moto have better phones than the 4s, so #$%$

Ever since I switched from Verizon to AT&T, I've never had a problem. My iphone never drops calls and I've become a very happy customer. Thank you AT&T

Too bad it is only a loss on paper...they deserve to lose. Their customer service and their phones are horrendous!!!!!!!

It always amazes me that anyone would actually pay good money for an iphone. I mean, besides women and children, them I can see.