Quick Note: Sprint to "Bet the Farm" on Apple's Next Generation iPhone
October 3, 2011 4:40 PM
comment(s) - last by
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."
commitment to making unlimited data a priority for its customers
(at a time when
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.
Wall Street Journal
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RE: What, How, Why?
10/3/2011 5:33:54 PM
I like having a phone I can customize. I am not locked into a specific App store. GetJar, Amazon, and the official store give me choices. I can also buy direct from developers.
I have a different keyboard, home screen, contact manager all which I enjoy better then what was given to me to start with.
RE: What, How, Why?
10/3/2011 10:45:32 PM
From what I've heard, iOS 5 is already Jailbroken, so the people who want choices will have them. Even when you Jailbreak, its still nice that Cydia provides structure. If there is a problem App, its fixed quickly, which is a good thing.
"Spreading the rumors, it's very easy because the people who write about Apple want that story, and you can claim its credible because you spoke to someone at Apple." -- Investment guru Jim Cramer
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