Using Twitter to announce $49 iPhone

Twitter may have finally arrived as a major marketing tool for huge corporations. A look at the AT&T (T) section of the microblog service shows an announcement that the phone company is beginning to sell $49 Apple (AAPL) iPhones. The phones are refurbished. The Twitter announcement sends people to the AT&T web site.

Critics of the Twitter business model say that the firm has not found out a way to bring in revenue. The AT&T marketing message is a case in point. Twitter received no compensation from AT&T, but the phone company will probably bring in new customers and get plenty of PR from the move.

Leaving Twitter aside for the moment, the news from AT&T raises the question of whether it is going to cannibalize the sale of high-end iPhones by offering cheaper used ones to customers who are looking for an economical way to own the handset. The AT&T decision may actually be extraordinarily clever. AT&T pays Apple, according to several sources, as much as $600 per iPhone and gets much less from its cellular services customers who buy the handset. AT&T makes it money on the subscriber service contract that goes with the iPhone. Selling refurbished units may be a way to get around the large payments to Apple.

AT&T's marketing of used iPhones on Twitter may be very useful to the phone company, but Twitter and Apple are probably losers in the process.

Douglas A. McIntyre is an editor at 24/7 Wall St.


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