Sprint has committed to buying $15.5B in iPhones in 2012

Feb 28, 2012
Finance

Sprint is taking its new partnership with Apple and ability to sell the iPhone 4S seriously – to the tune of some $15.5 billion. That’s the amount Sprint revealed it had committed to spend on Apple’s latest iPhone, according to a story from The Next Web. The information comes from a filing Sprint made with […]

Sprint is taking its new partnership with Apple and ability to sell the iPhone 4S seriously – to the tune of some $15.5 billion.

That’s the amount Sprint revealed it had committed to spend on Apple’s latest iPhone, according to a story from The Next Web. The information comes from a filing Sprint made with the U.S. Securities and Exchange Commission going through December 2012, detailing that Sprint intends to spend a minimum of $15.5 billion on iPhones. That amounts to some 24 million units Sprint will be making available to customers.

But Sprint is already expecting to have to pay for carrying the iPhone, at least in the short term. The company is expecting its mobile revenues to dip in 2012, largely driven by the high subsidy Apple charges on its phones, which are larger than other devices in Sprint’s stable. Sprint expects it’ll be a while before it really starts reaping the benefits of having the iPhone available on its network: namely, new customers and the higher fees they’ll pay for smartphones.

The same effect has already been felt by AT&T and Verizon, both of which carried the iPhone 4 last year. Both reported losses during the last quarter of 2011, and both cited subsidies paid to Apple as among the culprits. Meanwhile, Apple reaped some serious benefits, with Q4 2011 breaking revenue and profit records for the company.

As TNW reports, Sprint has said in the past that it estimates it needs to buy about 30.5 million iPhones from Apple in order to keep pace with its competitors, Verizon and AT&T. That’s a huge investment for Sprint, but it’s one that the company seems to think will pay off. And they have a lot of evidence to support that assumption: Apple reportedly moved a few million of the devices within days of its launch, and its record fourth quarter was due largely to the new smartphone.

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Sprint is already seeing some benefits, reporting that 40 percent of its new signups in Q4 2011 came from customers who wanted the iPhone. But it’s a big up-front investment for the company, one that Sprint will have to weather before it’s able to see some real gains from becoming the third U.S. cellular provider to carry Apple’s popular device.

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Phil Hornshaw

Phil Hornshaw is a freelance writer, editor and author living in Los Angeles, dividing his time between playing video games, playing video games on his cell phone, and writing about playing video games. He’s also the co-author of So You Created a Wormhole: The Time Traveler’s Guide to Time Travel, which attempts to mix time travel pop culture with some semblance of science, as well as tips on the appropriate means of riding dinosaurs. Check out his profile.

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