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 Originally Posted by jbg7474
This is great analysis, thanks, aero. When does Sprint have to cough up the full value to Palm? In other words, if Sprint charges me $200 for the phone, and Palm's retail value is $600, when does Sprint have to give up the $400?
On how much, never that much. a hypothetical $500 retail list by Sprint discounted to $200 after rebates and other discoutns might cost Sprint $375- $300 from the maker at wholesale. I have no idea other than that a certainly that the list price isn't near Sprints wholseale cost as this is not a price that has any retail competition. The list price is more or less meaningless highball price.
The handset could also drop in wholesale cost to the carrier over time.
I have no idea on the numbers sprint would pay for Pre. On one hand Palm was hard up, so that may mean a good price for Sprint on the initial guaranteed purchases. Maybe Palms costs will drop and Spint's costs wil rise if Pre takes off.
Also sometimes the maker is the one actually financing rebate to help push stock and sometimes it is the carrier, probably depending on who has the excess inventory on their books.
As far as when they pay, and who puts what on their books when, I am not very knowledgeable on what is customary in that business, or how often non customary deals are made, but it is my general sense that these are contracted between maker and carrier in large lots and are paid for on delivery of each lot, say of 100,000 initially and perhaps 10,000 or 50,000 follow on lots.
It is possible there is a sliding schedule of prices for each chunk committed to by Sprint.
In short I am pretty sure that Sprint pays in bulk when it takes large lot deliveries and that those prices are all contracted with a variable prcing setup.. I am also pretty sure that the cost to sprint is somewhere in the mid range between list price and discounted price.
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