) iPhone could reach nearly three billion new customers worldwide
-- but only if it is willing to change its policies. According to
, 2.8 billion potential iPhone customers continue to go untouched
as international cellular service providers fight against Apple's
China Mobile (NYSE:
), the world's largest mobile carrier, has yet to ink a deal with
Apple to sell the iPhone. NTT DoCoMo (NYSE:
), the largest carrier in Japan, has also chosen not to carry
Apple's prized smartphone.
While App Store revenue has been cited as a barrier (ex: China
Mobile reportedly wants a cut of all apps sold), iPhone subsidies
continue to be the most troubling feature.
reported that Sprint's (NYSE:
) margins fell significantly after it started carrying the
iPhone. Without it, however, customers were willing to walk away
from the carrier. This left Sprint with no option but to give in
to Apple's demands.
On Friday, the
Los Angeles Times
reported that U.S. Cellular (NYSE:
) has been experiencing the same problem. To prevent further
losses and to lure old customers back to the company, U.S.
Cellular will begin selling the iPhone later this year.
While Apple's high subsidies may be good for the company, they
may not be good for the consumer, as they are being blamed the
monthly rate increases from both Sprint and AT&T (NYSE:
). The increases apply to all smartphones, however, not just
those manufactured by Apple.
By the end of 2013, the Cupertino, California-based tech giant
will sell the iPhone through virtually every carrier -- postpaid
and pre-paid -- in America.
International carriers have more options. Consequently, they
have been less willing to accept Apple's terms.
Samsung, which offers dozens of phones in hundreds of markets,
has made it very easy for some carriers to ignore Apple. The
South Korean tech giant -- which produces the Galaxy S IV, Galaxy
Note II and other popular Android-based smartphones -- has been
more lenient in negotiating fair contract terms with
Since Apple can get away with its policy in America, the
company is unlikely to loosen its terms overseas. In doing so,
domestic carriers may see this as an opportunity to negotiate
better terms as well, which could put Apple in a very difficult
Louis Bedigian is the Senior Tech Analyst and Features Writer
of Benzinga. You can reach him at 248-636-1322 or
louis(at)benzingapro(dot)com. Follow him
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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