Hacker News Reader

Look at Verizon's profit vs Apple's.

http://www.bloomberg.com/news/2012-01-24/verizon-posts-loss-...

> Verizon and rivals such as AT&T Inc. sell the Apple Inc. (AAPL) iPhone and other smartphones at a loss as they compete to get customers to sign up for contracts that typically run for two years.

Verizon et al, run a 24x7 data/voice nationwide network.

That involves constant physical construction and capital investment.

Apple is the clear winner, selling their product at a premium with the middle man subsidizing the consumer's purchase price.

You're aware that Verizon is also paying Apple right? The $200 you paid for your iPhone turns into $600 for Apple.

The post looks at the no-contract prices, so it assumes you paid ~$600 for the phone and then sold it for ~$300 18 months later.

Putting up 1,000s of cell phone towers isn't exactly cheap and it's not like you can get it done in another country because it has to be done in your home country.