DailyTech - IPhone Won't Be Profitable for Sprint Until '15, Early Upgrades Ending June 1

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Gadgets IPhone Won't Be Profitable for Sprint Until '15, Early Upgrades Ending June 1
Brandon Hill (Blog) - May 16, 2012 2:05 PM

18 comment(s) - last by semiconshawn.. on May 17 at 8:31 AM

Apple is sure to see a much greater benefit from this iPhone relationship than Sprint

Apple's iPhone is a huge seller both worldwide and in the United States. At first, the smartphone was exclusive to AT&T's wireless networks in the U.S. Just over a year ago, Verizon jumped onboard. And with the launch of the iPhone 4S, Sprint was finally able to provide Apple's popular smartphone to its customers.

When the deal was first announced, it was reported that Sprint would purchase 30.5 million iPhone over the course of four years (at a cost of $15.5 billion USD). It was also reported that Sprint wouldn't make any money on the arrangement with Apple until at least 2014.

Fast-forward to today, and Sprint CEO Dan Hesse is now pushing back that profitability date until 2015. Hesse still stands by his assertion that "carrying the iPhone will be quite profitable;" shareholders are just going to have to wait a bit longer than they originally envisioned.

^{[Source: TechnoBuffalo]}

For anyone that questions Hesse's decision to make a deal with Apple, he simply tells them to take a look at embattled T-Mobile. T-Mobile recently announced that it would be laying off an additional 900 workers in the U.S. and has lost contract customers for 10 straight quarters.

T-Mobile is also the only one of America's "Big 4" wireless carriers that doesn't have the iPhone.

In other Sprint news, TechnoBuffalo has learned that the wireless carrier will end early upgrades for customers effective June 1. The program allowed customers to upgrade to a new phone within 10 to 14 days of their originally scheduled upgrade date.

Granted, waiting an extra two weeks isn't going to be a deal breaker for most people, so we doubt that many Sprint customers will cry themselves to sleep over this move.

Sources: Market Watch, Bloomberg, TechnoBuffalo

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RE: I agree

By gamerk2 on 5/16/2012 3:03:04 PM , Rating: 0

To be fair, thats how all business start up in the first place: You incur large amounts of upfront costs to design/produce a product, in the hopes that by selling that product, you will eventually turn a profit.

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RE: I agree

By Ticholo on 5/16/2012 4:20:55 PM , Rating: 2

Yes, I know.
And the guy has a point that not having iPhones on their roster can be a bad thing (though I can't imagine the iPhone is killing T-Mobile), but those upfront costs seem really high for it not to get too risky.

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