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  • WSJ: Sprint Prepared to Gamble It All on Big iPhone Bet

    Sprint is essentially betting all of its chips on the iPhone. As the third largest mobile operator looks to become a bigger player in a world largely dominated by AT&T and Verizon, the Wall Street Journal reports today that Sprint is poised to "bet the company" on the iPhone.

    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.
    Sprint has reportedly agreed to purchase approximately 30 million iPhones from Apple over the next four years at a total cost of about $20 billion. So big is Sprint's stake in the iPhone that the carrier will likely lose money on the deal until at least 2014. "In order to keep the price people pay for the phone low and competitive with rivals," the WSJ reports, "Sprint would be subsidizing the cost of each phone to the tune of about $500, which would take a long time to recoup even at the high monthly fees iPhone users pay."

    For now, sources close to Sprint will only say that the amount of cash Sprint is putting into the iPhone is ""staggering." But if the gamble pays off - and that's a big "if" - and Sprint attracts new customers (presumably, some of which will be siphoned away from AT&T and Verizon) the carrier may see itself on the most positive course it has charted in years.

    Still, industry analysts and market watchers say the gamble is worth it. As Sprint's chief executive confirms, the lack of the iPhone remains "the No. 1 reason customers leave" Sprint.

    Source: WSJ
    This article was originally published in forum thread: WSJ: Sprint Prepared to Gamble It All on Big iPhone Bet started by Michael Essany View original post
    Comments 10 Comments
    1. Razz's Avatar
      Razz -
      Man wouldn't that suck. Hopefully not a lot of people bought the i4 and are stuck with ATT for the next 2 years.
    1. AUZambo's Avatar
      AUZambo -
      Quote Originally Posted by Razz View Post
      Man wouldn't that suck. Hopefully not a lot of people bought the i4 and are stuck with ATT for the next 2 years.
      I'm locked in to AT&T for about another year, but you better believe I'll be looking Sprint's way if they maintain the unlimited everything plans.
    1. boxxa's Avatar
      boxxa -
      I am debating going to sprint's unlimited everything too. If the new iPhone is dual band GSM/CDMA, I can but it and then move when I decide too.
    1. silent1643's Avatar
      silent1643 -
      mm... would be good news if the coverage was there.. i'll stick with at&t
    1. RICO_'s Avatar
      RICO_ -
      Gotta beef up that network to. The iPhone can only get you so far and that "4G" network isn't cutting it.
    1. unison999's Avatar
      unison999 -
      Sprint may have signed a big contract with Apple, but gamble big? Doubt it. Because they do not pay all upfront, since Apple is known for delivering late or less than amount ordered it would not be much of investment on Sprint part. How much does the customer have to pay?My guess is same as other companies. What kind of plan is going to be offered?I heard Sprint is cancelling Everything plan, so still questionable on this. Will phone work when I am on data? Doubt it... I am switching over to Sprint even if they do not have iPhone, so this don't really affect me
    1. daytonaviolet's Avatar
      daytonaviolet -
      i plan to purchase my ip5 outright unlocked. i wouldnt mind going to Sprint at the right monthly plan. but, will Sprint also suffer the lack of data/phone usage at same time like Verizon?
    1. shigh's Avatar
      shigh -
      i just read a rumor on BGR about the I5 "rumored" to be sprint exclusive to begin with. gosh. i hope not.
    1. tayman's Avatar
      tayman -
      I have a buddy that works at Sprint, he told me today that theres been talks of Sprint getting exclusively, at least for a couple of months. It is possible that this could be the reason they put so much into the iPhone. But on the same hand, I dont think Apple is that stupid.
    1. shigh's Avatar
      shigh -
      oh well. the wait means i can save money. cant jump carriers. at&t has my soul.