AT&T iPhone Subsidy is $325 - Oppenheimer

AT&T (T) is paying a subsidy of $325 for the new Apple (AAPL) iPhone 3G, according to Oppenheimer analyst Yair Reiner. He notes that the typical smartphone gets a subsidy of about $200. The new phone will be sold at retail for $199 for 8 GB of memory, or $299 for 16 GB.

The higher subsidy rate for the iPhone, he says, “reflects AT&T’s faith in the iPhone’s ability to attract new subs and increase ARPU.” And he also says it has positive implications for Apple, since it effectively results in a playing field that is tilted in their favor. “Rivals must scramble to hit a lower, less profitable price point,” he writes.

Reiner also says that AT&T is paying Apple an extra $100 for subscribers signed up in Apple stores, for a total commission of $425. Reiner figures that all in, Apple is getting the same revenue for the 3G iPhone as it received for the old version, only now all the payments are coming up front.

Reiner says he remains comfortable with his current above-consensus estimates for iPhone units of 15.2 million in calendar 2008 and 33.2 million in 2009. He maintains an Outperform rating and $235 price target on the stock.

Meanwhile, ThinkPanmure handed over Apple coverage to analyst Vijay Rakesh, who starts the stock with a Buy rating and $225 price target, up from the $195 target used by his predecessor. “Catalysts are building with substantial subsidies on a global iPhone release and continuing strength in the core Mac desktop and portables market,” he writes. “We recommend that investors take advantage of the price weakness to build core positions in Apple, despite some of the stock weakness surrounding an uncertain consumer and CEO Steve Jobs’ health.”