::::How Apple's growth is hurting companies::::

<div class=&quot;custm_img_blk&quot;><img src=&quot;http://www.techgig.com/files/photo_1335320794_temp.png&quot; border=&quot;0&quot; align=&quot;left&quot; /></div><p>Apple is set to report another record quarterly profit on Tuesday, continuing the relentless string of results that's made it the world's most valuable company. Those profits don't come out of thin air: A range of businesses -- from the company's wireless carrier&nbsp;friends&nbsp;to its PC-making foes -- are seeing their profits melt away and flow to Apple's bottom line.</p><p>Apple's success is good for the US economy, and some businesses, like software developers and memory-chip makers, have benefited from the disruption Apple is causing. But its enormous gains have resulted in others' pains, sometimes in unexpected places.</p><p>* AT&amp;T Inc, for instance, took a chance on Apple's unproven phone in 2007, but the company might be regretting that decision. Since it became the first US phone company to carry the iPhone, its stock is down 25 percent. Apple's is up 415 percent.</p><p>*&nbsp;Best Buy&nbsp;has sold Apple products off and on since the late 1990s, but analysts now see Apple as a major threat to the US' only remaining national big-box electronics chain.</p><p>* Worst off, of course, are rival phone makers. Apple has just 8 percent of the global phone market, but makes about 80 percent of the industry's operating profits.</p><p>Wall Street&nbsp;analysts expect Apple Inc. to post a profit of $9.2 billion for the January to March quarter when it reports on Tuesday. That's roughly in line with the profit expected from the world's largest oil company, Exxon Mobil Corp.</p><p>The majority of the profit will come from&nbsp;iPhone&nbsp;sales, especially now that three of the four national US wireless carriers -- AT&amp;T, Sprint, and Verizon- sell the phone.</p><p>But, for a phone company, selling an iPhone is a bit of a gamble. The company pays Apple an average of $659 for iPhones and then sells them to consumers for between $50 and $200.</p><p>The phone companies count on making their money back, and more, in monthly service fees over the life of a two-year contract. Each iPhone comes with a data plan that adds at least $30 to a consumer's monthly bill. At AT&amp;T, the average iPhone user pays more than $100 per month.</p><p>It turns out, however, that some of the added income wireless carriers get from data plans is just compensating for a drop in what they're able to charge for calling minutes. The money is also eaten up by the cost of network upgrades to support all the data traffic -- the emails, photos andYouTube&nbsp;videos iPhone users consume.</p><p>&quot;The primary beneficiary of the growth in wireless data has been one company - Apple,&quot; saysWilliam&nbsp;Power, an analyst with R.W. Baird &amp; Co.</p><p>Despite the smartphone boom created by Apple's iPhone, &quot;free cash flow,&quot; or the cash left over every quarter after expenses and capital spending, hasn't grown at the major U.S. wireless companies since 2007, according to Power's calculations.</p><p>In the same period, Apple's free cash flow has grown more than sixfold, to over $40 billion last year.</p>

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