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Piper Jaffray: AT&T paying Apple $18 per iPhone, per month

Over the life of a two-year contract, AT&T is paying Apple more per iPhone than it now costs to actually buy one, according to a financial analyst.

The exact details of AT&T's revenue-sharing agreement with Apple have not been disclosed, but one analyst thinks that over the two-year life of a user contract, the amount exceeds the actual price of the iPhone.

Silicon Alley Insider spotted a research note from Piper Jaffray's Gene Munster estimating that Apple is receiving $18 per month for each iPhone subscriber, under the revenue-sharing agreement between the two companies. Apple has confirmed that such an agreement exists, but has not shared the details about exactly how much cash it's getting from the revenue AT&T makes on iPhone customers using the carrier's data network. In July, Munster estimated Apple was receiving just $3 per iPhone subscriber and $11 per iPhone customers new to AT&T, but he's rethought the numbers after Apple's latest earnings release.

Munster takes the 1.4 million iPhones that Apple has sold since the device made its debut, and subtracts the 250,000 iPhones that Apple said it believes were bought to unlock from AT&T's network, to calculate that there were 1.15 million revenue-generating iPhones in play during Apple's fourth quarter. He then uses the $118 million that Apple recorded in iPhone-related revenue during the quarter to estimate out how much service revenue Apple took in from its share of AT&T's data charges by subtracting his estimate of hardware revenue generated by the sale of each iPhone, based on the average selling price.

iPhone users on AT&T's data network could be giving Apple as much as $18 a month under their revenue-sharing agreement. CNET Networks

It's a little tricky because the iPhones that were sold in June and July have obviously been generating revenue for longer than the ones sold in September, but he arrives at a figure of $18 per iPhone subscriber in monthly payments to Apple during the fourth quarter.

That would mean that over the life of a two-year contract, AT&T will pay Apple $432 per iPhone subscriber. Silicon Alley Insider adds the $400 in revenue per iPhone and uses iSuppli's cost estimates to calculate a $565 profit per iPhone over a two-year period. I'm a little wary of those iSuppli numbers myself (they don't really account for things like research and development costs), but the exact number isn't really the point: Apple has a huge incentive to make sure iPhones stay on AT&T's network, even if Munster's numbers aren't perfect.

I sent Munster an e-mail with a few questions, including whether it's fair to assume that the $18 a month figure will remain constant over the two-year contract, but I haven't heard back yet. A reader of Tuesday's iPhone blog made a fair point that Apple still gets revenue from the sale of an unlocked iPhone. But it's leaving quite a bit of money on the table if that phone doesn't run on AT&T's network.