“With the new iPhone coming out this week, Sprint Nextel Corp. is finally expected to gain access to a device it has long coveted—but at a staggering cost,” Joann S. Lublin and Spencer E. Ante report for The Wall Street Journal.
“The No. 3 wireless company is making a multibillion dollar gamble that Apple Inc.’s gadget will be the ticket to a turnaround, even though Sprint Chief Executive Dan Hesse told the board in August that Sprint would likely lose money on the deal until 2014, according to people familiar with the matter,” Lublin and Ante report. “Mr. Hesse told the board the carrier would have to agree to purchase at least 30.5 million iPhones over the next four years—a commitment of $20 billion at current rates—whether or not it could find people to buy them, according to people familiar with the matter.”
Lublin and Ante report, “The board ultimately signed off on what the company internally called the ‘Sony’ project, concluding Sprint couldn’t compete otherwise. Directors figured, “How can we pass this up? We have to have it,” the person familiar with the matter said… The lack of the iPhone is “the No. 1 reason customers leave or switch,” Mr. Hesse said at an industry conference last month.”
Read more in the full article here.
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and if sprint can’t deliver, who cares. it’s chapter 11 time
Sprint only stands a chance if they come with some enticing, competitive plans. If they think they’ll make the money back by jacking up the prices on iPhone owners, then they have another thing coming.
Are these guys for real? Turns out that Sprint isn’t only the purveyor of dumb pipes but has a monopoly on dumb management. Betting the farm on the iPhone might just be a foretaste to buying the farm for poor old Sprint.
Users will benefit from this I guess.
Big bucks – but in four years time – LETS raise that to 10 Billion a year and it might be send more serious.
Apple requires carriers to commit to buying huge numbers of iPhones, but in their turn, Apple buys the components in massive quantities and pays manufacturers up front.
For any company that comes on board with Apple, the expectation is for massive sales. If they would rather not take the associated risk, they can say no and let otherssell iPhones instead. The deal is that you take a share of the risk and get a share of the profits.
Sprint may be in a position to sell a good service with an unlimited data plan and therefore differentiate itself from some of their rivals. I think they’re doing the right thing.
30 million iPhones in four years is mere under 2 million units per quarter in average. Initially, sales might be less than the average, and later more than the average.
Overall, not that crazy amount at all.
Why would Apple bother to work with Sprint if the company cannot commit to moving a reasonable number of units? If Sprint plays its cards right, it might sell many more iPhones that its minimum commitment.
AND, now everyone knows why T-Mumble will ALWAYS be niche player…. AWFUL MARKETING PEOPLE and NO BALLS.
I don’t know… I rather like the T-Mobile Girl. And I know I am not alone. :->)
so if Sprint gets a girl and she is naked, you’ll like sprint better?
You are most certainly not alone Ralph
At least there’s a chance that Sprint’s entry into the game might lead to price competition on cellular plans. As things are, Verizon and AT&T charge whatever they want and customers have to pay it.
I don’t like spoilers and have, so far, managed to avoid all the rumours surrounding the Oct 4 event on MDN (or anywhere on the web). Until this headline.
C’mon!
I won’t dig deep on rumours, but here’s an idle question: can Apple afford to make a certain model of iPhone exclusive to any one carrier, however large the $20B payout feels in your pocket?
As for Sprint, this makes some crazy sense, only because there are no better alternatives that I can think of. There’s none more iconic than that iPhone currently.
I guess, iPhone ‘X’ won’t be exclusive to Sprint, though the 30 million units will corner a good chunk.
“I won’t dig deep on rumours, but here’s an idle question: can Apple afford to make a certain model of iPhone exclusive to any one carrier, however large the $20B payout feels in your pocket?”
i guess you didn’t pick up on the new AT&T iPhone exclusive?
Only AT&T gets the 4G iPhone in the USA.
Weep or laugh but that is how the cookie crumbles.
Verizon is so screwed too, Verizon should not have jumped into that Android lawsuit.
Greedily drinking the Android Kool Aid makes you do suicidal things, just ask Samsung.
Mac
Agreed.
Would be fantastic if Apple ditches Verizon simply because. Highly unlikely, business is business; but this is Apple and something insane should never be unexpected.
If iphone5 is exclusive to Sprint. Then, I say goodbye AT&T. Thanks goodness my 3gs contract is over. Frankly, I hope they have the exclusive on the iphone 5. I need unlimited to mean unlimited, not 5GB.
I thought the same as you for a few minutes. I checked Sprint’s coverage map and even though I live in San Jose, CA. In the hills just east of the city, I am more than three miles from Sprint coverage. And our place in Aptos down the coast from Santa Cruz is not covered. Our vacation condo in Utah is not covered and I guess I am with AT&T and our iPhone 4 for what, 4 years. I don’t think a faster chip and bigger camera are worth upgrading. AAPL is going down tomorrow afternoon, thinking of getting out in the morning before the news is widespread.
Good luck with that prediction, Hugh.
“The lack of the iPhone is ‘the No. 1 reason customers leave or switch,'”… Not mine. The reason I switched is because Sprint has the worst customer service I’ve ever experienced with any company in any category! I will not subject myself to that kind of stupidity ever again, even if they come up with the cheapest (unlimited) data plan. Some things just aren’t worth saving a buck over.
I guess I am a victim of old age and public schools but could someone show me the math on that?
Is there a substantial system upgrade required also, like replace every tower with an ivory one?
T-Mobile stuck with only Android is so… screwed!
Mac
No carrier that had an iPhone agreement has gone bankrupt so far. There are hundreds of carriers in almost a hundred countries, and those that signed on for the iPhone had successfully weathered the recession/great depression.
Does someone actually believe that Sprint may have a hard time selling 30 million iPhones??
And if Android is “winning”, then why would Sprint make this move in the first place?
I agree, unless Sprint suffers from terrible service quality as a result of so many iPhones flooding their network (which is, admittedly, a real possibility), I don’t think they’re going to have a problem selling those iPhones.
I had a thought…. (I know pace myself;-)) What if the the LTE chips still suck (batteries) but it is possible to do wimax on the existing iPhone5 CPU (I read somewhere a bit ago that they had perfected integrating wimax on a chip onto the CPU die)
If it only took Apple a bit of work to make the iphone 5 wimax, but LTE simply isn’t possible (for 6 or 9 mos) Then Sprint would effectively have an exclusive for a 4G iPhone 5 (other carriers would get the iPhone5 with 3G (and in the case of euro and AT&T HSPA+)
So AT&T & GSM carriers would do OK (HSPA+ at 25mbps is nothing to turn your nose up at) Sprint would be the golden child (for a few quarters anyway) and Verizon & T-mobile would be the big losers (should this be true)
The mind reels….
I switched from Sprint to AT&T to get the iPhone 4 after years of waiting. Loved Sprint, and wouldn’t know about customer service because I never needed to contact them.
Still under contract with AT&T so I won’t be switching back just yet.
2014???!? That’s crazy
The iPhone 8 will be out then and Sprint will have a lot of inventory they won’t be able to get rid of.