Comcast and Charter made some potentially high risk deals with Apple in order to secure rights to sell the iPhone on their struggling networks.
Even though they are the two largest cable companies in the US, Apple was able to strong-arm Comcast and Charter into selling large numbers of other Apple products. In some cases they had to agree to sell them at a discount and eat the subsidized cost.
Both Charter and Comcast offer wireless service through Verizon’s network as a MVNO. Neither company has more than 2 million subscribers and decided they couldn’t compete with the four major carriers without selling the iPhone. Sensing their weak position, Apple leveraged it to sell more iPads and Apple TVs.
CNBC’s latest report couldn’t confirm exact details but did reveal that Comcast has to sell thousands of iPads every year as part of their iPhone contract. The deal was struck two years ago when Apple was concerned about iPad sales. Shipments are on an upswing lately though so the deal might not have been horrible for Comcast.
Apple took advantage of Charter by making it sell more Apple TVs. The device can be used as a set-top box replacement so Charter lets customers buy one for $7.50 per month on a two year contract. Because of its deal with Apple, Charter has now become the largest third-party reseller of Apple TVs.
These type of deals aren’t unheard of in the industry though. Apple has had long-running relationships with the major U.S. carriers for years, some of which were risky to carriers initially because they had to pay the subsidized costs of the iPhone.
