Sprint gambling $20 billion on iPhone deal?
The Wall Street Journal is reporting that Sprint has landed a huge $20 billion deal with Apple to purchase roughly 30 million iPhone units over the next four years.
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. In order to keep the price people pay for the phone low and competitive with rivals, 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.
Sprint is calling this an "all-in" gamble as they're essentially betting the farm on the iPhone to keep them competitive with Verizon and AT&T. But this seems to us like a very high risk gamble for Sprint to take.
BGR also claims they have word from an "incredibly solid source" that Sprint has landed an exclusive deal on the iPhone 5 with support for 4G WiMax out of the gate, with AT&T and Verizon only getting the device later next year.
I have been told that Sprint will be getting the iPhone 5 — yes the real iPhone 5, not the iPhone 4S — as an exclusive. And it will be a WiMAX device. AT&T and Verizon would launch the iPhone 4S and get the iPhone 5 sometime in the first quarter of next year as an LTE device. Globally, the iPhone 5 might be available as a 4G HSPA+ device.
Wouldn't it be far more likely, however, for Sprint to get a budget iPhone 4 and offer it at a far cheaper contract than AT&T or Verizon?