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Let's use the earlier example of $10 per month that Apple receives from AT&T.

If the base profit on an iPhone for Apple is $100, and they receive $240 from AT&T over the life of the contract, their total profit for that one phone will be $340.

If it is sold as an unlocked phone at the same price then Apple will only realise $100 in profit on that one phone.

So in order for Apple to get the same amount of profit from the unlocked phone, they would need to set the price to be $240 higher.
You're still missing the point. We're talking about the sales of iPhones in Canada. It doesn't matter who buys what here, it's not going to affect American profits... unless of course Americans start coming here to get unlocked iPhones... lol.... ain't gonna happen.....
 

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It's not gonna happen...

Digital Journal - Exclusive: Holt Renfrew Insider Says iPhone Coming to Canada in Two Weeks

We have received word from Mario Manza, Executive Director of VIP Services at Holt Renfrew, that they will not be carrying the iPhone for now. He said he confirmed this information with the buyers this morning and apologized for any misinformation on behalf of the company.

It sure is a weird scenario: Yesterday we placed cold calls to their accessories department and they were telling everyone the iPhone would be there in two weeks. They were even going so far as taking down phone numbers of people who called, informing them they will call back when it arrives in two weeks. They even quoted the exact price of $799.

Yesterday we also received a panic-sounding call from Holt Renfrew's PR team saying this deal was not confirmed "yet" -- "yet" being the operative word.

If you call today, however, the same employees are now saying they are no longer getting the iPhone anytime soon. Digital Journal's insiders are now saying the same thing.

As we mentioned, and as most people agreed, Holt Renfrew sounded like a very unlikely place for the iPhone to be launched in Canada. But the retailer does carry expensive Nokia, D&G and Prada phones, and they have carried iPods in the past.

So rumour is quashed, for now (according to Mario Manza). Holt Renfrew insiders still say Rogers will have it in January but they say it's not clear why a potential Holt Renfrew deal fell through. We'll see if we can get more information on that.

We'll keep you posted if we learn anything new.
 

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One more reply from Holt Renfrew...

Thank you for your inquiry of the Apple I Phone. I regret that the I
Phone, originally planned for our store this fall will no longer be
available at Holt Renfrew. In fact, due to other obstacles, the phone
will not be here any earlier than January 2008. At that time, it may be
into Canada, however, will not be for sale through us.

We do carry a similar looking phone by LG, the Prada phone. While not as
technically advanced, is still a wonderful fashion phone and I suggest
you take a look at it the next time you're in town.

Please do not hesitate to contact us should you require any further
assistance.

Best regards.
Grace Chan
Executive Assistant to General Manager
Holt Renfrew - Vancouver
(604) 681-3121
 

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I knew it did not make sense the minute I saw this. Aside from all the other factors, the most electronic thing sold at Holts is a nose hair trimmer
Not true, when I mentioned this to a customer of mine he said that he has seen unique cell phones in Holt Renfrew in the past, including one he believed to be from Bang & Olufsen. As one of the other posts did point out, they have sold phones from companies like Prada in the past, as well as iPods.
 

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You're still missing the point. We're talking about the sales of iPhones in Canada. It doesn't matter who buys what here, it's not going to affect American profits... unless of course Americans start coming here to get unlocked iPhones... lol.... ain't gonna happen.....
No, I believe that you're missing the point. If I'm selling a product, doesn't matter where I am selling it, only what I am eventually going to see on my bottom line. In the example I provided earlier, the hypothetical example was an overall profit of $340 ($100 from the original sale and $240 over the 24 months of the contract).

I develop a pricing structure that gives me a certain return for each unit sold. All of my business plans are based on the return I get per unit sold, so if something happens to change that (i.e. phones sold without the AT&T contract), I need to find a way to recoup the lost revenue. In some ways it is no different than dealing with an exchange rate. If the currency in the country I am selling my product in goes down, I need to increase my prices to guarantee that my return stays the same.

You seem to think that Apple only cares about the profit from the original sale when it has been discussed that Apple is also including the monthly revenues on their books.
 

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I develop a pricing structure that gives me a certain return for each unit sold. All of my business plans are based on the return I get per unit sold, so if something happens to change that (i.e. phones sold without the AT&T contract), I need to find a way to recoup the lost revenue. In some ways it is no different than dealing with an exchange rate. If the currency in the country I am selling my product in goes down, I need to increase my prices to guarantee that my return stays the same.

You seem to think that Apple only cares about the profit from the original sale when it has been discussed that Apple is also including the monthly revenues on their books.
But sales to Canadians and other countries aren't even in your business plan, and since you are still making a profit on each unit sold, the net effect in an increase in profit over and above on sales that are over and above what you modeled for.
 

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But sales to Canadians and other countries aren't even in your business plan, and since you are still making a profit on each unit sold, the net effect in an increase in profit over and above on sales that are over and above what you modeled for.
Yes they are in my business plan because I modelled the units to be sold through US distribution, namely the Apple Stores and AT&T. And now it is distribution in other countries where I am still receiving recurring revenue for a 24 month period. A unit sold is a unit sold, regardless of where it ends up. Apple has wisely tied themselves into the ongoing service contracts and they are planning for that income, because they are not selling the device through any other channels.

Why do you think that cell phone companies give away or discount new handsets at different rates based on the length of contract you sign up for? They are looking at the overall return rate for that unit. Their total revenue for the unit will be more or less the same no matter whether you purchase the unit without a contract, or purchase it with a 1, 2 or 3 year contract.

Why do you think that printer companies practically give away their printers, because they know that based on their models and forecasts and predictions, each unit sold will result in $xx of consumables. The total revenue they will receive from one unit will be the original purchase price plus the xx.x number of cartridges that they figure the average buyer will purchase.
 

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No, I believe that you're missing the point. If I'm selling a product, doesn't matter where I am selling it, only what I am eventually going to see on my bottom line. In the example I provided earlier, the hypothetical example was an overall profit of $340 ($100 from the original sale and $240 over the 24 months of the contract).

I develop a pricing structure that gives me a certain return for each unit sold. All of my business plans are based on the return I get per unit sold, so if something happens to change that (i.e. phones sold without the AT&T contract), I need to find a way to recoup the lost revenue. In some ways it is no different than dealing with an exchange rate. If the currency in the country I am selling my product in goes down, I need to increase my prices to guarantee that my return stays the same.

You seem to think that Apple only cares about the profit from the original sale when it has been discussed that Apple is also including the monthly revenues on their books.
Whatever.
 

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Apple receives $9 a month from AT&T in addition to the $399 hardware charge. That's lost revenue for Apple. AT&T makes money off the plans, that's lost revenue for them. This is assuming that Holt is only importing the phones unlocked for Canadian use because we don't have a carrier. But it would make sense if Holt was including a $300 cell phone case. Actually, $300 for a cell phone case at Holt is a bargain, should be $499 for the phone + $1000 for the case = $1499?
 

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