filed in E-Business on May.07, 2013
A year and a half ago, Dillon said U.S. Cellular Corp. had the opportunity to carry the phone but rejected it because it was too expensive. The iPhone is more expensive than most smartphones, and phone companies absorb this cost to sell it for $199 or less.
Dillon says many of the customers leaving the Chicago-based company are doing so because it doesn't carry the iPhone. In the 18 months since she talked about rejecting the iPhone, the company has lost 268,000, or 5 percent, of its customers on contract-based plans, which are the most lucrative.
Apart from the wholesale cost of the individual phone, carriers face another obstacle: Apple requires them to commit to purchasing a minimum amount. In the case of U.S. Cellular, it has promised to buy $1.2 billion worth of iPhones over three years, according to a regulatory filing. That's roughly 2 million phones.
Investors appeared to be concerned about the cost of the phone, too. U.S. Cellular shares fell $1.08, or 2.8 percent, to $37.39 in afternoon trading. The company has its own stock listing, but is controlled by Telephone & Data Systems Inc., a phone company.
With U.S. Cellular's embrace of the iPhone, the six biggest cellphone companies in the U.S. will all be selling it. Many smaller ones do as well. The iPhone was sold exclusively by AT&T for three and a half years, and the subsequent broadening of the carrier base has been crucial in boosting Apple's sales. No. 4 T-Mobile USA was locked...