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

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.

Jeff Bailey is an editor for the YCharts Pro Investor Service which includes professional stock charts, stock ratings, stock screener and portfolio strategies.