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Sprint CEO Dan Hesse   (Source: Mark Costantini/The Chronicle)
Sprint is reportedly committing to purchase 30.5m million iPhones over the next four years

All signs are pointing towards Sprint getting Apple's next generation iPhone, and the official announcement will come tomorrow during Tim Cook's keynote address. However, the price that Sprint will have to pay to join the iPhone brotherhood in the U.S. -- along with fellow wireless carriers AT&T and Verizon -- will be tremendous.
 
According to the Wall Street Journal, Sprint has agreed to buy 30.5 million iPhones over the next four years from Apple. The price tag for Sprint is a whopping $20 billion USD. Sprint will be subsidizing the cost of each on-contract phone to the tune of $500.
 
Another risk for the copmany is the fact that Sprint won't even make any money on the deal until at least 2014.
 
Sprint CEO Dan Hesse approached Sprint's Board of Directors with the deal, and they were understandably hesitant about betting the company on Apple's smartphone prowess. But in the end, the Board felt that it was fighting a losing battle against larger rivals Verizon and AT&T which both have the iPhone. In addition, if AT&T's planned acquisition of T-Mobile were to be approved, its fortunes in the marketplace would be even more dire.
 
The board eventually decided, "How can we pass this up? We have to have it."

With Sprint's commitment to making unlimited data a priority for its customers (at a time when Verizon and AT&T are putting bandwidth caps on users), such a deal could help bolster Sprint's survival chances in this cutthroat industry.
 
While Hesse and the Board are definitely onboard with the iPhone deal, investors are less thrilled. Sprint shares closed at $2.73, representing a 10.2 percent drop from the opening bell.

Sources: Wall Street Journal, Bloomberg, Google Finance



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RE: Leave AT&T/Verizon
By TheRequiem on 10/3/2011 4:56:27 PM , Rating: 2
I am! One thing to keep in mind, this article makes it sound like Sprint is betting everything it has on the iPhone, but really, all they did was just order a lot of phones. The absolute worse thing that could happen is Sprint breaks even, however, with a $100+ pofit on each iPhone sold, they are set in place to make a lot of $$$. This also does not account for millions of new subscribers for unlimited data, which I think will be a huge deal to a lot of people wanting more freedom and cheaper prices.


RE: Leave AT&T/Verizon
By Reclaimer77 on 10/3/2011 5:05:37 PM , Rating: 3
The grass isn't always greener. I have a Galaxy S II, unfortunately it's serviced by Sprint. Let me tell you, it's like having a Ferrari chained to a oil tanker anchor. Unlimited plan? I'm lucky if I have enough 4g signal in my area to hit any other providers cap out there. So what's the point of having an unlimited plan. Thank god almost everyone has wi-fi for me to connect my phone to when I'm out on the town doing stuff, or I might have returned my phone and waited for Verizon or AT&T to get the Galaxy II.

Sprint should have taken this money and invested it in replacing their dreaded WiMax network with LTE. You know, like everyone else in the world did already?

I'm just saying before you jump ship, do what I didn't do. Research Sprint's coverage map for your area.


RE: Leave AT&T/Verizon
By cjohnson2136 on 10/3/2011 5:09:38 PM , Rating: 2
I researched when I jumped shipped and also talked to people in my area who have Sprint. The 4G coverage in my area is always full bars. From time to time I will have 3 bars but that not to often. A few of my friends are jumping ship as soon as the iPhone goes to Sprint.


RE: Leave AT&T/Verizon
By Reclaimer77 on 10/3/11, Rating: -1
RE: Leave AT&T/Verizon
By Brandon Hill (blog) on 10/3/2011 5:43:59 PM , Rating: 5
Well, it's a good thing that I'm not shallow enough to base my friendships on what phones (or cars) they buy ;-)


RE: Leave AT&T/Verizon
By Reclaimer77 on 10/3/11, Rating: -1
RE: Leave AT&T/Verizon
By xype on 10/3/2011 5:59:18 PM , Rating: 2
quote:
Having friends with people who need to have their life experience validated by a popular smartphone? Nah Brandon you have it all wrong, THAT would make me shallow :)

Judging people by their choice of a mobile phone: Not Shallow™. Got it, thanks for clearning that up!


RE: Leave AT&T/Verizon
By Pirks on 10/3/11, Rating: 0
RE: Leave AT&T/Verizon
By Reclaimer77 on 10/3/2011 9:55:22 PM , Rating: 1
quote:
Judging people...


They aren't people, they're sheeple :)

quote:
Not Shallow™


LOL, nice!


RE: Leave AT&T/Verizon
By FITCamaro on 10/4/2011 11:27:24 PM , Rating: 2
Yep all the Apple sheep at work today were fawning over the new iPhone. I was like "it doesn't even have 4G". But it has a better camera!

Besides how could they sell you an iPhone 5 in 6-12 months if the 4Gs had 4G?

I'll enjoy insanely fast data speeds while Apple sheep snap worthless pictures of themselves using their other Apple products.


RE: Leave AT&T/Verizon
By TakinYourPoints on 10/3/2011 9:42:57 PM , Rating: 2
It's a good thing you don't judge people based on what products they buy, what a hypocrite that would make you


RE: Leave AT&T/Verizon
By bjacobson on 10/3/2011 6:08:21 PM , Rating: 2
yeah me too wtf i paid for 4gs and im only getting 3 bars thought it was supposed to be 4/????


RE: Leave AT&T/Verizon
By TheRequiem on 10/3/2011 5:17:38 PM , Rating: 3
It is a well known fact that coverage differs carrier to carrier in different locations. Where I live, in Las Vegas, Sprint has awesome 4g and 3g and even get's signal in elevators in the casinos where as our AT&T phones do not. It's your own problem to check coverage before you purchase a phone and use it in your area if your supposedly having such difficulty. Sprint service has been really good for my wife, no issues. So that's a matter of your opinion and the general consnsus is that it has improved greatly with it matching Verizon in cust satisfcation inex. With AT&T, I have to call three times just to find out basic information sometimes.

I think the grass will be greener, in time. Sprint's Network Vision is amazing technology and they will be the only ones. It may be aburden now, but in the future it will save them billions and improve the experience. I'm also pretty certain Sprint is well aware of the limitations of it's partner Clearwire and it's Wimax network and so we will see on october 7th, the amazing 4g lte plans Sprint will have as a part of Network Vision, which will allegedly run on 800mhz and have ridiculous building penetration. 800mhz is not that far off from Verizons and AT&T's LTE spectrum in the 700mhz bands, it's close enough that you won't notice any difference.


RE: Leave AT&T/Verizon
By The Raven on 10/3/2011 6:51:13 PM , Rating: 2
Yeah these guys are complaining about not having a lake nearby right after they bought a boat.

I lose Sprint signal in the boondocks. But I don't care because of the low low price that I pay. Just so long as it works in my house and the places I frequent. I don't care if I am connected to the world via phone when I am camping for example.


RE: Leave AT&T/Verizon
By Reclaimer77 on 10/3/2011 8:43:19 PM , Rating: 1
Ever heard of Charlotte N.C? Yeah umm I live a few miles from a massive metropolitan area, so excuse me for assuming a nation wide carrier would have at least decent coverage in my area. If Verizon or AT&T customers had a problem here too, you would have a point. But Sprint is the only carrier with issues. Your analogy is off base and silly, this ain't no boondocks.

You can bash me all you want, but Google searches will tell you all you need to know about Sprint. Great data plan, bad data network.

But they ARE working on it. So there's good news.


RE: Leave AT&T/Verizon
By sigmatau on 10/3/2011 10:21:07 PM , Rating: 2
It's worse in Raleigh/Durham. Maybe it's my phone, but out of AT&T, Verizon, Sprint, and even Boost, the worst one is by far Sprint. I thought it was my phone but I had someone else test theirs when I was having issues with mine and they couldn't dial out.

Sometimes it will take 5 tries to place a call. This is downtown with 4 bars. Why would I freaking care about going to an unlimited plan from Sprint if I can't even place simple calls consistently?


RE: Leave AT&T/Verizon
By TheRequiem on 10/4/2011 11:35:03 AM , Rating: 2
It's ok, in time, you will learn to join the dark side of the force.


RE: Leave AT&T/Verizon
By Gamingphreek on 10/4/2011 11:45:56 AM , Rating: 2
Your argument is terrible and biased. **Boost IS Sprint with no roaming**


RE: Leave AT&T/Verizon
By TakinYourPoints on 10/3/11, Rating: -1
RE: Leave AT&T/Verizon
By Brandon Hill (blog) on 10/4/2011 7:49:07 AM , Rating: 3
Charlotte, NC is a major banking center in the U.S. To mention that Raleigh/Durham is basically Silicon Vally East.


RE: Leave AT&T/Verizon
By Reclaimer77 on 10/4/2011 8:58:56 AM , Rating: 2
Please, don't even dignify his discriminatory antics with a response, Brandon.


RE: Leave AT&T/Verizon
By retrospooty on 10/4/2011 9:32:15 AM , Rating: 2
"Charlotte, NC is a major banking center in the U.S. To mention that Raleigh/Durham is basically Silicon Vally East. "

It is true, these cities are modern and very metro... Reclaimer, however is still an Appalachian Nazi.


RE: Leave AT&T/Verizon
By TakinYourPoints on 10/4/2011 5:00:02 PM , Rating: 2
I didn't say anything about Raleigh/Durham, I'm fully aware of the large tech community over there.

I'll talk smack about Charlotte all I want though. :)


RE: Leave AT&T/Verizon
By The Raven on 10/5/2011 12:12:39 PM , Rating: 2
quote:
excuse me for assuming

Sorry I won't. And neither will the court system re: the contract you entered into. If fact, I don't know how you got stuck in such a situation with the softball laws that we have protecting idiot consumers re: carrier contracts. So no, you have no excuse unless there is something I am missing (like you were grandfathered in on a 10 yr contract lol).

And I didn't mean to come across as saying anything disparaging about NC.

I am simply saying that there are some places (could be NYC for all I care) that get good reception on some carriers and not so good/no reception on others. All that matters is that it works where you need it. And if it doesn't work where you need it, then why are you using it and complaining about it. My experience has been great with Sprint while living in NorCal, SoCal and the STL area. If it doesn't work in NC and I lived there then I wouldn't be with Sprint either.

There is either a lake where you live or there isn't. Don't complain if you bought a boat.


RE: Leave AT&T/Verizon
By AmbroseAthan on 10/3/2011 5:26:59 PM , Rating: 2
For myself, I have hit in excess of 20GB a few months on Sprint. The bulk of this is streaming Google Music or Pandora to my phone. While lately this is on 4G, for a very long time in my old office it was only 3G and I still hit those numbers (using Pandora then, as no Google Music then). I don't know any providers that have caps that would accomodate me to do so on 3G/4G using my phone.

And Sprint's LTE network starts roll out in the beginning of next year. So this is ontop of that also occurring.


RE: Leave AT&T/Verizon
By Keeir on 10/3/2011 5:50:54 PM , Rating: 1
Errr...

Lets review:

Iphone order: 20+ Billion
Market Cap: ~8.5 Bullion
Yearly Revenue: ~32 Billion
Net Income: ~-3 Billion

Sprint is essentially in the position where it -must- do more than break even on new deal. I also think the assumption that each iphone sold --> 100 dollar profit is pretty optomistic.

If a large percentage of these iphone go to NEW sprint customers who also do not ABUSE the data plans, then I could see this working very well for Sprint. But if Sprint fails to move the Iphones (After all there are better phones and better networks) or if Data usage is abusive to the point additional capitol projects need to occur... this could essentially be the tipping point to failure of the company. Its not like with ATT a few years ago. If an iphone customer is unhappy with the Sprint Network, there ARE other options.


RE: Leave AT&T/Verizon
By retrospooty on 10/4/2011 9:36:48 AM , Rating: 2
You have to throw in the monthly revenue from the new customers with voice and data plans. It adds up fast.


RE: Leave AT&T/Verizon
By TheRequiem on 10/4/2011 11:38:05 AM , Rating: 2
Precisely, I don't see that input there in that mathematic formula. Carriers don't make the bulk of their cash from the phones, they make a very miniscule amount compared to what they make in 2 years of retaining that customer.


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