The chatter has increased regarding carriers reducing subsidies for mobile phones. The most obvious example of this is with two carriers in Spain.
I have been following AAPL for far too long, and truly understand how utterly STUPID the current chatter is. I want to emphasize the word stupid, its stupid.
I use the word stupid because in the data centric world we currently live in, people making the claim are simply ignoring the obvious data smacking them in the face. (Kinda the same reason there is a company growing at over 50% free cash flow, earnings and over 20% revenue, yet selling at 13x multiple.)
For anyone who does not remember how the iPhone rolled out (and it appears there are too many):
1. iPhone was rejected by Verizon due to the subsidy.
2. ATT took on the iPhone. Their user base and profits grew.
3. The success of the iPhone on ATT was the proof of concept for the rest of the carriers to follow suite.
ATT and Verizon are currently trading at multi-year highs. MULTI-YEAR HIGHS. Let me repeat that, despite the negative chatter about the "subsidy issue", the carriers are trading at multi-year highs.
Carriers are trading at highs because the model works. (Oh, lets ignore the fact that the carriers created this model.)
In this big data driven world, if we look at the data correctly, the current situation is a mutually beneficial agreement.
As for the two carriers in Spain, they just ceded new costumers to the third largest carrier, Orange, while maintaining the cost of upgrades from current costumers. (Basically, they cut off new costumers while maintaining high costs. Its the opposite of smart.)
For the record, I want to see carriers succeed too. I like VZ, and think they will benefit regardless of the above bullshit issue, as the data out of VZ suggests. This is why I maintain it for my timeless portfolio.