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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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RE: Cricket
By eagle470 on 2/28/2013 10:49:14 AM , Rating: 2
Let the market decide, I for one will not be renewing my contract with a new subsidized phone. Instead, I will pay full price and simply go month to month.


RE: Cricket
By Motoman on 2/28/2013 1:35:52 PM , Rating: 2
Yes, but it sounds like (at least in this case) you're not an idiot. Most people are, and they're easily cowed by marketing and propaganda.


RE: Cricket
By Solandri on 2/28/2013 3:36:32 PM , Rating: 3
I would love to let the market decide. Unfortunately the carriers won't let it. Except for T-Mobile, they all charge you the same monthly service fee (which supposedly includes subsidy) whether or not your phone is subsidized (in contract).

You buy a $700 iPhone for $200 and a 2-year contract at $75/mo. The $500 price subsidy over 24 months + interest works out to about $25/mo. So the service actually only costs $50/mo, and the extra $25/mo is to pay for the phone. But after the 2 years are up, the carriers continue to charge you $75/mo. Meaning the market perceives the extra $500 for the phone as "free" when in reality it's the carrier stealing money from them once their contract is up.

The FTC really needs to force carriers to turn these subsidies into a loan. If you want a carrier-subsidized phone, fine. But the subsidy has to show up in your bill as a separate line item, and it has to disappear once your contract is up.


“We do believe we have a moral responsibility to keep porn off the iPhone.” -- Steve Jobs














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