DailyTech - Quick Note: Sprint to "Bet the Farm" on Apple's Next Generation iPhone

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Gadgets Quick Note: Sprint to "Bet the Farm" on Apple's Next Generation iPhone
Brandon Hill (Blog) - October 3, 2011 4:40 PM

62 comment(s) - last by inperfectdarkn.. on Oct 7 at 9:35 AM

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 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 ;-)

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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!

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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!

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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.

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