Business

Market Rumor? Sprint Allegedly Agrees to Purchase 30.5 Million iPhones in Return for Exclusive iPhone 5 Deal

Here is an interesting story from the Wall Street Journal (WSJ):

Sprint Chief Executive Dan Hesse told Sprint’s board in August that the carrier would have to agree to purchase the iPhones over the next four years—a commitment of $20 billion at current rates—whether or not it could find people to buy them, according to people familiar with the matter.

Other sources corroborate the claim. According to infomobile and PCMAG.com, Sprint has indeed agreed to purchase 30.5 million iPhones from Apple at a value of $20 billion.

Why?

Sprint is the no. 3 wireless carrier service in the nation and they have not posted profit since 2006.

“This is a bet-the-company kind of thing,” said a person familiar with Sprint’s decision making. The projected hit to the company’s operating income is “staggering,” the person said to the WSJ.

What about this deal makes them think that it will put them on top?

Well, according to Jonathan S. Geller of BGR:

I have been told that Sprint will be getting the iPhone 5 — yes the real iPhone 5, not the iPhone 4S — as an exclusive. And it will be a 4G WiMAX device. AT&T and Verizon would launch the iPhone 4S and get the iPhone 5 some time in the first quarter of next year as an LTE device. Globally, the iPhone 5 might be available as a 4G HSPA+ device.

Really? That may actually put them in the lead. Also, it would not be impossible for Sprint to sell the 30.5-32 million iPhones under its contract to Apple. After all, AT&T and Verizon together sold nearly 12 million iPhones in the first half. And a boost from an exclusive iPhone 5 deal may actually put them over the top.

Gigamon weighed in on the issue:

Electronista reports that despite the talking-about-it-without-really-talking-about-it routine, Hesse “framed [the iPhone] as the key to Sprint’s future business,” saying that the “number one reason customers churn” was “because of the iPhone.”

Wednesday morning AllThingsD said to expect Apple to unveil the iPhone 5 on October 4.

In this scenario, according to BGR, Sprint’s new iPhone 5 will offer:

  • Faster CPU.
  • Larger 4-inch screen, similar to LG’s NOVA display but with a higher resolution.
  • 1GB of RAM.
  • Slightly larger design overall, but thinner and with a larger battery.
  • 32GB of storage.
  • iPhone 5 exclusive software and APIs (Assistant).
  • Dedicated Assistant button, possibly integrated with the new home button

Whereas, according to FOX news, the iPhone 4S will only feature the following:

  • A low voltage Apple A5 CPU (it won’t be the same as the iPad 2 chip, clock for clock)
  • Updated front and back camera sensors. FaceTime HD in the front, 8-megapixel 1080p HD video recording in the back
  • Multiband 3G Qualcomm chipset — North American & international bands for AT&T and global carriers, North American CDMA & international bands for Verizon and Sprint
  • NFC support
  • Metal or “premium” plastic on the back case

The Journal sums it up:

If Sprint has bet right, the iPhone will be the device that finally breaks the company’s half-decade-long slide and keeps much larger rivals Verizon Wireless and AT&T from running off with the bulk of the wireless industry’s subscribers and profits. If it’s wrong, the iPhone deal will saddle the company with a costly albatross at a time when it is already stretching to manage an expensive network upgrade and cover debt payments.

The fact that AT&T has consistently ranked dead last in terms of service could also give Sprint with the boost that it needs. Furthermore, the fact that Sprint needs to differentiate itself in order to beat out market competition might imply that it will be offering charge-free data plans to “poach” customers from both Verizon and AT&T.

“Interestingly, according to Bloomberg, the Sprint iPhone will be available with an unlimited data plan, which would help set the device apart from rival AT&T and Verizon-powered devices,” reports the Christian Science Monitor.

But as the iPhone spokesperson said, it could all just be speculation and rumor.

Final word from BGR:

I told my source that even if Sprint paid Apple hundreds of millions, a Sprint iPhone 5 exclusive still would never happen. $20 billion in guaranteed iPhone sales, though? We’ll see tomorrow.

Update: Apple unveiled the iPhone 4s (which will be available to sprint) but there is no iPhone 5.

“Subscribers of the ailing company will be able to use the iPhone for the first time when Apple releases its latest model, the 4S, on Oct. 14,” reports the Associated Press.

Comments (33)

  • Grace1798
    Posted on October 6, 2011 at 9:34am

    We will never buy one. It’s a waste of good money, waste of time. I’d rather spend my money on my future rather than make those who make money off iphone wealthy. I’d rather be the one who creates items that people want to buy, making ME rich….that’s the way to go. I’d rather not be a slave to buying trinkets. Our plan is to invest in our future, not to impoverish ourselves with mere entertainment that never lasts.

    Report Post » Grace1798  
  • babylonvi
    Posted on October 4, 2011 at 5:15pm

    iPhones are a direct line to NSA ans other govt. agencies for you information and whereabouts, even months after the fact. I can‘t believe all the sheeple think they can’t live without a smart phone. Great marketing, now they won;t have to but monitors everywhre to track the population, the sheeple are buying the monitors FOR them AND paying for the monitoring service.

    Report Post » babylonvi  
  • Grace1798
    Posted on October 4, 2011 at 1:01pm

    I have zero interest in IPHONES. BORING! I am on the computer all day long at work. I don’t want to carry a computer around with me. No thank you. This is not the time to blow money on this stuff, times are going to get much, much worse and you won’t be able to even sell those things for food.

    Report Post » Grace1798  
  • doctroprint
    Posted on October 4, 2011 at 12:00pm

    People, the iphone 9 will be out in 16 months, just hold your cash till then, that is if you think your 300 dollar phone you just bought will last till then…. get real!

    Report Post » doctroprint  
  • doctroprint
    Posted on October 4, 2011 at 11:56am

    I think I have decided to stay with the phone I bought last year. Tired of this crap. These phone platforms are making adults act like kids. If you need to run out and get the new Iphone then your just admitting you bought a piece of crap for 200 bucks last year. It is a circle and everyone has been looking so foolish over the past several years. It’s going on with the pc tablets as well. Wow, once they figured people will do anything to have the new game systems, they pull this with the adults AND YOU FALL FOR IT!. Wake up people, it’s a scam. the phone you had four years ago makes the same call you place today!

    Report Post » doctroprint  
  • Socialism_Is_The_New_Black
    Posted on October 4, 2011 at 11:34am

    One more thing for those running a tight budget. I have verizion but would like to make those aware of Walmart’s Staight Talk ( I can never say that with a straight face – lol – for the double entendre). Suuprised the gay community isn’t protesting that one. I digress….. The $30 and $45 plans are a steal! There is a nice Android Samsung that you can use on the $45 unlimited plan. There is also a way to get certain Iphones to work on Staight Talk for those tech savvy.

    Report Post »  
  • Socialism_Is_The_New_Black
    Posted on October 4, 2011 at 11:21am

    @ItTakesFaith – The only reason apple fashionistas can give is ease of use and aesthetics. Oh, lets not forget the already mentioned status symbol. The Mac has a great operating system but it’s frustrating for hands-on people because many features you may have become accustomed to in Windows are left off for simplicity’s sake. Windows computers are more susceptible to being compromised due to the fact they greatly outnumber apple. The hacker community are only going to fish in the full ponds. Apple keeps their customers from flash because they probably feel most of their customers are in fact too stupid to implement proper security on their equipment. Keeping you all from flash gives apple the ability to tout superior security. My wife and I are a 3 Windows pc, 2 smart phone having family of geeks and don’t need over priced crap to check email and play angry birds. Why would I spend 3 grand on a apple to play Battlefield 3 with great frame rates when I can do it for a third of the price on a Windows pc? As for cost — you know the answer to that ! Now that the Mac is basically a PC in drag it’s not hard to detect that the money goes on the pretty case, advertising and the expensive real estate for Apple stores.

    Report Post »  
  • Blah Blah Blah Blah
    Posted on October 4, 2011 at 11:07am

    Launching on 10/4 with sprint. With that date there is a clue. 10-4 Good Buddy (Push To Talk) PTT
    http://www.forbes.com/sites/derekbroes/2011/09/30/appless-iphone-5-features/

    Report Post »  
  • Pontiac
    Posted on October 4, 2011 at 10:59am

    The worse thing a PC user can do is to install Proprietary Apple software for their iCrap.

    All of this is tossed on your computer, most you can’t opt out of.
    -AppleApplicationSupport
    -AppleMobileDeviceSupport
    -AppleSoftwareUpdate
    -Bonjour
    -iTunes
    -Quicktime
    -Safari
    Got a slow booting computer? Its because you install bloatware like that…^

    On top of that if you reinstall or connect your device to too many pc’s it wont register.
    You’ll have to call them to get your device to connect.

    Report Post » Pontiac  
  • Jennifer_D
    Posted on October 4, 2011 at 8:41am

    I currently have an unlimited data plan with a blackberry from Sprint. We have considered switching service providers many times to reduce our overall monthly charges. Sprint also has a terrible selection of phones for their customers to choose from not to mention terrible customer service at times. Adding the iPhone to their arsenal may help Sprint be more competitive; however, they had better hope that their customers will stay with them and upgrade to the iPhone. Personally, I think they are overrated and the idea of the touchscreen is terrifying. My one experience with a phone that had a touchscreen was terrible. It was clunky and an all around a hassle.

    I’ll take my blackberry any day over an iPhone!

    Report Post » Jennifer_D  
    • DanWesson455
      Posted on October 4, 2011 at 9:49am

      How in the world did we ever make it in the 50‘s through the mid 90’s without a phone glued to our ears. I mean gads, One princess phone with extended cord in the kitchen. Keep me unplugged. Life is so stress free. If I break down on the road I just wait for the next cop to come by. His radio will have AAA there in a hop skip and a jump. Guess I am just getting long in the tooth for ALL this new telecommunication stuff.

      Report Post » DanWesson455  
    • drlax15m
      Posted on October 4, 2011 at 11:44am

      You don’t find the blackberry interface clunky?! What touchscreen did you have a bad experience with? I held off on buying a smart phone until touchscreen was available, I never found tiny buttons, tiny screens, and tiny scroll balls appealing. Swipe, tap, and pinch all the way!

      Report Post »  
    • SovereignSoul
      Posted on October 4, 2011 at 7:45pm

      @DanWesson455 Guess I am just getting long in the tooth for ALL this new telecommunication stuff.

      Apparently, you don’t include a computer with internet access in “all this new telecommunication stuff.”

      Report Post » SovereignSoul  
  • sillyfreshness
    Posted on October 4, 2011 at 1:50am

    I just don’t get how Apple can control the electronics market like it does, especially considering how locked down their devices are (can’t remove the battery without sending it to Apple, doesn’t support Flash, Apple controls apps for sale, Apple controls what websites you can browse). Android is so much better. Don’t get me wrong, Apple is innovative, but to promise to buy $20 billion from Apple? That’s a lot of iPhones. Apple is nothing but an elitist status symbol. It’s mainly supported by Starbucks latte drinking liberals (bourgeois liberals). Apple is riding on their name for now to be able to milk $20 billion from Sprint. If Sprint can’t bring in new customers as expected, this will break them as they are already mega debt ridden. It looks like an all or nothing last ditch effort to get back in the game. I know Sprint is fighting ATT over them buying T-mobile. Sprint tried to buy T-mobile first and lost that game. We’ll have to wait and see if this was brilliant or a terrible plan. I don’t see why Apple is so elitist that they demand Sprint commit $20 billion to them. That’s is a ridiculous ransom.

    Report Post » sillyfreshness  
    • ItTakesFaith
      Posted on October 4, 2011 at 5:48am

      Take it easy, “Silly”! I couldn’t disagree more with your assessment of Apple. First of all, the company is NOT, as you say, “…an elitist status symbol”, but rather a supremely innovative business model, period. Since it’s founding, Apple has operated upon a “closed” operating system. While the company doesn’t “control what websites you can browse”, it does maintain some control over the software developers with which it choses to associate. That has assured the legendary Apple quality control and compatibility; and almost completely insulated the operating system from ANY viruses so common among all other PC platforms. I have used Apple products almost exclusively for well over 25 years, and I’ve NEVER had a security breach or compatibly problem of any kind! While (admittedly) the company struggled in it’s early years, since Steve Jobs return (and development of the current team), it hasn’t missed a step: from the MacBook Pro, iPod, iPhone and iPad, to the revolutionary software that makes it all operate seamlessly… no competing product is even in the same league (Android? Seriously?!).

      While I have no idea exactly what will be revealed later this morning (the CIA could learn from Apple secrecy…!), watch for the new “Assistant”, which will feature the company’s fore-ray into ARTIFICIAL INTELLIGENCE…Wow!

      If Sprint is willing to commit $20,000,000,000, and bet the entire future of it’s company on the iPhone, that certainly doesn’t sp

      Report Post » ItTakesFaith  
    • ItTakesFaith
      Posted on October 4, 2011 at 5:59am

      For evidence of the Android’s inferiority, one only needs to look a few stories down the page on The Blaze… where we learn:

      “Android phones are apparently at major risk for leaking your private information. Why? Artem Russakovskii reports for Android Police, “because HTC set their snooping environment up this way.””

      This would NEVER happen with the Apple platform…

      Report Post » ItTakesFaith  
    • PatrioticTechnogeek
      Posted on October 4, 2011 at 10:39am

      @ittakesfaith HTC is not in control of Android. Therefore, to say that “Android phones….” is a bit misleading. Unlike iOS, anyone can look at the source code of Android, and see for themselves whether it is secure or not. And, in essence, Apple does control what websites you can visit. You cannot visit a website that uses Flash for any key components on the site, as many do.

      Report Post »  
  • TerryJ70
    Posted on October 4, 2011 at 12:39am

    This doesn’t make a lot of good business sense to me, unless Apple is planning to buy Sprint. Otherwise it is a risk I do not see Apple making.

    Report Post »  
    • THE-FINAL-ACT
      Posted on October 4, 2011 at 1:14am

      Just another way of getting every man woman and child a iphone. Funny how everyone always stares at that image ;)

      Report Post » THE-FINAL-ACT  
  • The-Monk
    Posted on October 4, 2011 at 12:35am

    Don’t those 30.5 M Iphones already belong to people? How will Sprint purchase a product that already belongs to someone else? Or are they going to purchase 30.5 M un-purchased Iphones and call them theirs? I don’t understand.

    Report Post » The-Monk  
  • javasport
    Posted on October 4, 2011 at 12:04am

    Please squash the deal. Sprint sucks. I want iPhone on 4g with Verizon! I won’t move to sprint

    Report Post »  
  • AnAmerican111
    Posted on October 4, 2011 at 12:03am

    So much for wanting an IPHONE 5…….
    I will continue to DROID with Verizon!

    Report Post »  
  • Geekgurl
    Posted on October 3, 2011 at 11:41pm

    I am a current Sprint customer for the last decade. Recently my yearly upgrade deal was taken away after being a part of my membership perk. I suppose that now they will attempt to force me to get an I phone because they no longer carry other brands. PFFT! There are other carriers. Droid rocks!

    Report Post »  
    • Jennifer_D
      Posted on October 4, 2011 at 8:53am

      I have been a sprint customer for a long time as well. We recently had the same yearly upgrade perk taken away from us too. We are still considering going with another carrier because of it. It isn’t like Sprint has a great collection of phones for their customers to chose from. The yearly upgrade was a bonus because at least you could have a new phone every year. I didn’t always use the perk, but when you have been a loyal customer for such a long time those perks do matter!

      Report Post » Jennifer_D  
    • Storm6791
      Posted on October 4, 2011 at 10:57am

      I work for Sprint and you are incorrect about them taking away your Premier program! Under your current Gold or Silver Premier program you get upgrades at specific times. With Silver you get a $75 Upgrade Eligibility off the full price of a new phone at 1 year under your contract and at 22 months you get the full $150.00 Upgrade which gives you the promotional pricing the same as a new line of service discount. Under Gold you get an upgrade yearly for the full $150.00. No one was using their 1 year upgrade so Sprint decided to change the program. You still get upgrades every 22 months like you already did but you don’t have the 1 year option. The premier progams name is changed now to the New For You program. So everyone still gets their upgrades and Sprint did not take anything from you just streamlined the program to cut costs while still allowing your upgrades. If your Silver you can use any last upgrades you have till 12-31-11 and under Gold you can use your last upgrade under the old program till 12-31-12.

      Report Post » Storm6791  
  • Del Scorcho
    Posted on October 3, 2011 at 11:24pm

    I’m a current Sprint customer. Yet, I have no need or desire to purchase an I-anything from them. All they need to do to keep my business is follow the K.I.S.S. (Keep It Simple Stupid) rule and don’t piss me off by trying to sell me anything with a call from India!

    Report Post »  
  • Restoreamericanow
    Posted on October 3, 2011 at 11:04pm

    To ExRepublisheep:
    NOOOOOO! Obama would NEVER try to interfere with private business dealings!!! Lol. That’s INSANE! EXCEPT for……….GM, Boeing, Solyndra, Wall Street, etc. That’s right….crazy!!!!!!

    Report Post » Restoreamericanow  
  • Thevoice
    Posted on October 3, 2011 at 10:51pm

    Is that how they teach to run a business in school today ..Sprint is the no. 3 wireless carrier service in the nation and they have not posted profit since 2006. ….What a joke…

    Report Post » Thevoice  
    • Thevoice
      Posted on October 3, 2011 at 11:07pm

      Reminds me of the American airlines story today…They have a order in to Boeing and air bus for like billions of dollars in new jets …Yet no way to pay for them. ..The question..is there any reality anymore …or is it just a bunch of make believe guessing of what some idiot thinks will happen when he spends the other guy’s money …

      Report Post » Thevoice  
  • RightPolitically
    Posted on October 3, 2011 at 9:44pm

    The early bird gets the worm. Watch the government move in and quash the deal.

    Report Post » RightPolitically  
    • Snowleopard {gallery of cat folks}
      Posted on October 3, 2011 at 10:04pm

      Of course they will unless a significant gift is given to Obama’s re-election funding; in the old days it will be what was called a bribe.

      Report Post » Snowleopard {gallery of cat folks}  
    • Exrepublisheep
      Posted on October 3, 2011 at 10:10pm

      BEHIND YOU!!! Whew, thought I saw Obama sneaking up on you Snow. Wait, whats that sound? Is your computer making weird sounds? Is that a new mailman? WHY’S THAT VAN ACROSS THE STREET?

      Report Post » Exrepublisheep  
    • hifi74
      Posted on October 4, 2011 at 12:32am

      Seriously Demosheep? You don‘t think Obama wouldn’t meddle in the private dealings of a company? Hmmmmmmm let‘s see there’s only half a billion in tax payers dollars wasted on Solyndra, then there is GE, GM, Chrysler, and the list goes on and on. So Snow’s “paranoia” is a lot less like paranoia and makes your inane sycophant ranting look like a liberal loon who still hasn’t got a clue. Run along Demosheep, I think I hear your mommy calling for you.

      Report Post » hifi74  

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