Abusive Relationships: Apple is No Sweetheart to AT&T, Verizon and Sprint

Although the charts in this Y Charts is about a month hold the story still holds true.  I had an earlier post [March 1, 2012 The iPhone is a Nightmare for Carriers] that raised the issue between Apple $AAPL its carriers of choice.  As the charts show below there has been a great divergence between the stock price of Apple and the price of a carrier once it accepts the iPhone. 

There are steep differences between Apple and the carrier companies themselves, they are in fact in different industries.  However it appears on the surface that the carriers have not reaped the gains of the iPhone at all.  I wonder how the impact of increased iPad sales will do to the carriers.

By Jeff Bailey
Who’s getting the better of this partnership?

Apple Stock Chart by YCharts
As David Sarno of the Los Angeles Times wrote in a brilliant article last week, the wireless carriers that sell the iPhone for Apple (AAPL) – AT&T (T), Verizon (VZ) and most recently Sprint (S) – are getting the short end of the stick.

Sarno offers this quote from Craif Moffett, analyst at Sanford C. Bernstein: “Can Apple continue to roll through industry after industry, soak up all the profits and leave everything it touches as a smoking wreckage?” To which the recorded music industry – if it’s not busy getting counseling at the abused-spouses shelter – would answer, “Uh, yes.”

Apple’s market cap has gone up abou $350 billion since AT&T started selling the iPhone.
It isn’t just stock price on which Apple is thriving and the carriers losing. They pay Apple about $600 for an iPhone, Sarno reports, and then sell the gadgets to consumers for about $200, hoping the monthly payments on a two-year agreement more than make up for the outlay. But mobile customers increasingly want a new iPhone when the model upgrades, and that can mean another negative $400 transaction to keep them from bolting midway through the two year deal.

Consumers win and likely appreciate Apple, not the carriers. Apple wins. Thee carriers get their clocks cleaned.  Here’s what Verizon’s gotten out of being one of three carriers going steady with Apple, over the course of its agreement (the AT&T chart above runs the course of the carrier’s agreement with Apple):

Apple Stock Chart by YCharts
And Sprint:

Apple Stock Chart by YCharts
As iPhones have come to represent more than half its revenue, Apple’s profit margins have fattened.

Apple Profit Margin Chart by YCharts
The carriers are trying to boost Android sales, and that would be good for them, as well as for Google (GOOG), Google’s pending acquisition Motorola Mobility (MMI), LG, Samsung and HTC.
But for now, the carriers are stuck in a bad relationship.