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Print 33 comment(s) - last by timothyd97402.. on Mar 4 at 7:02 PM

Carrier could have $100 million worth of unsold iPhones by midyear

The iPhone 5 has been a sales success for most carriers around the world. However, Cricket Wireless – the no contract prepaid network operated by Leap Wireless -- isn't having luck selling the iPhone 5 and is seeing stock levels climb as consumers opt for other devices.

Leap Wireless says that it believes it will sell about half as many iPhones as it committed to sell during the first year of its contract with Apple, which ends in June. Leap Wireless believes that the poor sales could leave it with as much as $100 million worth of unsold iPhones by the middle of 2013.


Leap Wireless has 5.3 million subscribers and areas where it can sell the iPhone are limited by its limited network coverage. Leap was the first of the major prepaid carriers in the US to offer the iPhone last year.

Perhaps the biggest challenge facing Leap Wireless and other prepaid carriers who offer the iPhone is one of cost. While carriers that require a contract, such as AT&T and Verizon, are able to subsidize the cost of the iPhone making it significantly cheaper up front, Leap charges the full retail price of $500.

Considering that pre-paid carriers tend to attract customers shopping on a budget coming up with $500 could be a stretch for many subscribers leading them to “cheaper”, subsidized phones.

Source: Wall Street Journal



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MVNO's
By Samus on 2/28/2013 8:57:12 AM , Rating: 2
I don't even understand why MVNO's are playing into Apple's sales model? This isn't what MVNO's generally stand for. Virgin Mobile has had similar problems moving iPhones, even though they offer the lowest priced iPhone plan in the industry.

What is obvious is when unsubsidized, people lose interest in the iPhone because of the ridiculous $500+ price tag. Other Android and WinMo phones of comparable quality, features and often superior screen size cost hundreds less.

Then there is the blind-observation buyer who simple looks at an iPhone next to, say, a Galaxy S III, and says to themselves, hmm, the iPhone is smaller, heavier and more expensive. What are my alternatives?

The unsubsidized model will kill Apple.




RE: MVNO's
By xti on 2/28/2013 9:01:05 AM , Rating: 4
actually, if you look at the cricket website, ip5 is 440, gs3 is 380...not exactly hundreds

both dont make sense since obviously you to go cricket when there are financial limitations...yet you blow over $200 on the phone up front.


RE: MVNO's
By TSS on 2/28/2013 10:00:02 AM , Rating: 2
It tends to make sense as subscriptions are alot more expensive if you count up what they cost you over the duration vs what the same pre-paid phone plus a sim only subscription costs you. Suprise, if you want the carrier to risk upfronting the cost you have to pay for the privilege.

For example the smartphone i recently got cost me about 340 euro's, prepaid phone, prepaid plan, no debt or payments. Had i gotten the same phone with a contract from a carrier here, it would've cost me ~1375 euro's over 2 years. Only after which the phone would be actually mine.

The iphone is a different story however as it is Apple who does the mark ups and not the carriers. Even in webshops where other phones are cheaper pre-paid then with the carriers, the Iphone is still just as expensive as with a contract. The reason why carriers have it is because of the hype however and they hope to make their profit on volume. Apple already makes their profit when the carrier buys the phones, not when they sell it to their customers.

So why on earth any carrier would offer it without subscription i haven't got a clue. I don't even know why they continue to offer the Iphone when they could get much higher profit margins on android devices, it's not like they're legally obliged to sell Apple stuff. Yet.


RE: MVNO's
By Samus on 2/28/2013 10:14:21 AM , Rating: 3
I see the iPhone5 as $499 and GS3 as $379. The GS3 is substantially more "phone" than the iPhone5 though, so my original post was not necessarily a fair comparison (although the GSIII is still cheaper.)

The Galaxy S Victory for $269 and HTC One SV for $279 are more comparable to the iPhone specs (same processors, ram, slightly larger screens, LTE, etc) whereas the GSIII has all the bells and whistles like NFC, huge screen and Touchwiz GX.


RE: MVNO's
By xti on 2/28/2013 10:39:35 AM , Rating: 3
the only spec you mentioned that appeals to the masses is the screen and 4G. I really wish my gs3 didnt have the clunky plastic look and feel. I hate how much better the apple app store is than google play. NFC is cool and obviously used heavy in marketing, but if you google tech sites, which are pro-heavy users, the usage is barely half...which translates to minimal given the average joe.

the point is, "cricket" and "non-subsidized phones" are practically opposing concepts.


RE: MVNO's
By Samus on 2/28/2013 11:38:32 PM , Rating: 2
considering the average lifetime of s phone is about 2 years maybe they should be made out of basic recyclable plastic.

also, if you drop the lighter, more impact resistant galaxy s3 from the same height as the heavier steel, aluminum and glass case of the iphone, guess which one is more likely to break?


RE: MVNO's
By xti on 3/1/2013 8:36:39 AM , Rating: 2
dont drop the phone? lol...


RE: MVNO's
By timothyd97402 on 3/4/2013 7:02:48 PM , Rating: 2
iPhone 4s is still the best made piece of kit I have ever owned. It is very nice looking and feels very solid. I have dropped it naked twice and you'd never know it. I checked out the Galaxy S3 and was not impressed with the look and feel and didn't really care about the screen size. I am not sure I feel the same about the iPhone 5.


RE: MVNO's
By DanNeely on 2/28/2013 3:06:03 PM , Rating: 2
Cricket isn't an MVNO, it owns and operates significant amounts of AWS (1900x2100mhz) and PCS (1800/1900mhz) spectrum. Along with US Cellular and formerly MetroPCS (until the T-Mobile finishes the takeover) Cricket's one of the little three carriers that operates its own primary network. They sit between the big 4 and MVNOs (and tiny local carriers) in terms of scale/status. Being squeezed from both sides it's questionable how well or if they'll be able to survive.


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