iPhone Competitors Close In on Apple

By Harry Kimball,  Newser Staff
Posted Jun 10, 2009 12:23 PM CDT
The iPhone 3G S.   (AP Photo)
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(Newser) – Until recently, the iPhone ruled the smartphone roost, but a new crop of competitors could threaten Apple’s bottom line, Jon Fortt writes for Fortune. AT&T, the sole iPhone carrier, pays Apple $300 for every new customer. Until now, paying for the privilege made sense, because AT&T monopolized the “high-value data junkies.” But “these new iPhone rivals,” Fortt writes, “are bound to alter the math of the phone wars.”

If the Google G2 and the Palm Pre take off, “AT&T will have less incentive to subsidize the iPhone so heavily," Fortt writes. "And if Apple begins selling the iPhone through other US carriers, subsidies will come under even more pressure.” Apple is innovating in terms of software to keep its top-dog status, but the message is clear: “Competition is good for consumers, but probably not for Apple's profit margins.”