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  • Verizon May Owe Apple $14B Over iPhone Sales Shortfall


    The nation's largest wireless operator may owe Apple an astounding amount of money due to a pretty dramatic iPhone sales shortfall.

    According to an investment research firm’s analysis of SEC filings, two out of every five smartphones sold in the U.S. this spring were iPhones. But that may still be insufficient to save Verizon from having to shell out a large sum of money to Apple for not selling an adequate number of devices to prevent the anticipated sales shortfall.

    Verizon must sell $23.5 billion worth of iPhones this year to meet a commitment the carrier made to Apple three years ago.

    Because of slower-than-expected sales, Verizon now must double its iPhone sales of last year. If it falls short, the company could be on the hook for as much as $14 billion, Moffett Research said in a report released this week.
    “It is likely that Apple would be reluctant to simply ignore these commitments, since many other carriers around the world are probably in a similar situation, and a simple amnesty would set an unwanted precedent,” the research firm wrote, according to the L.A. Times. “It is therefore unrealistic to think that Apple won’t extract some consideration for renegotiating these shortfalls.”

    With AT&T, Sprint, and T-Mobile among the U.S. carriers that Verizon now has to compete with on iPhone coverage, it may not get any easier for Verizon to hit its established sales targets.

    Source: L.A. Times
    This article was originally published in forum thread: Verizon May Owe Apple $14B Over iPhone Sales Shortfall started by Michael Essany View original post
    Comments 26 Comments
    1. Scotty Manley Silberhorn's Avatar
      Scotty Manley Silberhorn -
      Quote Originally Posted by browne81 View Post
      I did a little research and got varying #'s but it looks like verizon is worth at least 100 billion dollars so, while I am sure they rather not give up 14b. They can afford it and not miss a beat.
      Just because a company is worth so much, doesn’t mean they have the money to pay for it.
    1. Channan's Avatar
      Channan -
      So Verizon needs to sell over 36 million iPhones this year? Yeah not gonna happen.
    1. *T*'s Avatar
      *T* -
      “It is likely that Apple would be reluctant to simply ignore these commitments"
      What the hell? "Reluctant"? Who in their right mind turns down $14 billion dollars?
    1. vinaygoel2000's Avatar
      vinaygoel2000 -
      Quote Originally Posted by *T* View Post
      What the hell? "Reluctant"? Who in their right mind turns down $14 billion dollars?
      If you had $100 in your pocket, would you really care if I give you $2?
    1. iPhoneThereforeIAm's Avatar
      iPhoneThereforeIAm -
      Verizon May Owe Apple $14B Over iPhone Sales Shortfall ... there's an app for that.
    1. unison999's Avatar
      unison999 -
      Quote Originally Posted by vinaygoel2000 View Post
      If you had $100 in your pocket, would you really care if I give you $2?
      To proparly make the analogy you need to say "If you have $100 in your pocket would you want $14?", but that would mean more people would say "yes I want that $14" than you would like.
      Also this is not $2, this is $14 billion.
      Apple's $100 billion is out of the country, this $14 billion is in U.S. which Apple can use without paying tax to bring the money into U.S.
      If I am a stock holder I would want Apple to collect this money, if I am lawyer for Apple who drafted the damn contract want Apple to collect.
      I hope they just spend that $14 billion correctly, hire some innovative people and create something new!!!!