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Sprint Commits to Buying $20 Billion Worth of iPhones, To Get Redesigned iPhone 5 Exclusively?

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MacRumors

macrumors bot
Original poster
Apr 12, 2001
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The Wall Street Journal reports the Sprint is preparing to "bet the company" on the iPhone, agreeing to purchase 30.5 million units over the next four years regardless of whether they are purchased by customers or not. At a current average selling price of $655 for the iPhone, the agreement is a nearly $20 billion commitment for Sprint.
Mr. Hesse told the board the carrier would have to agree to purchase at least 30.5 million 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. In order to keep the price people pay for the phone low and competitive with rivals, Sprint would be subsidizing the cost of each phone to the tune of about $500, which would take a long time to recoup even at the high monthly fees iPhone users pay.
Click to expand...
With a source calling the projected hit to Sprint's operating income "staggering", the company's directors agreed to the deal as an all-in gamble to give Sprint hopes of competing against AT&T and Verizon.

The report notes that such commitments aren't unusual for Apple's carrier partners, demonstrating the leverage Apple has gained with the iPhone. With multi-year deals carrying unusual provisions for increasing units over time, Apple is locking in carriers for the long haul in much the same way that it has sought to lock in component suppliers for its hardware.

iphone5.jpg



In the wake of the new report on Sprint's massive iPhone commitment, BGR reports that this development may lend weight to claim they had heard that had previously seemed outrageous - that the iPhone 5 does indeed exist and that it will launch as a 4G WiMAX as a Sprint exclusive.
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 WiMAX device. AT&T and Verizon would launch the iPhone 4S and get the iPhone 5 sometime in the first quarter of next year as an LTE device. Globally, the iPhone 5 might be available as a 4G HSPA+ device.
Click to expand...
The claim reportedly comes from an "incredibly solid" industry contact and is one which has seemed simply unbelievable. But with Sprint clearly betting the future of the company on the iPhone, it is at least possible that it may have gone to extreme lengths to make a staggering entrance to the iPhone market.

BGR's rumor record has been spotty over time, and it's hard to imagine Apple making this move. Still, we mention it for interest and discussion in the lead up to tomorrow's media event.

Article Link: Sprint Commits to Buying $20 Billion Worth of iPhones, To Get Redesigned iPhone 5 Exclusively?
 
Article Link
https://www.macrumors.com/2011/10/03/sprint-commits-to-buying-20-billion-worth-of-iphones-to-get-redesigned-iphone-5-exclusively/
TimUSCA

TimUSCA

macrumors 6502a
Mar 17, 2006
701
1,539
Aiken, SC
I'm really torn right now... on one hand, it's the WSJ. They speak volumes and don't usually open their mouths unless they're very sure of their sources.

On the other hand, I can't believe Apple would do this. There isn't a single iPhone 4 user out there that has completed their 2-year contract with AT&T or Verizon. They'd be pissing in the faces of every single iPhone 4 user by not allowing them to upgrade without a ton of hassle.

As much as I trust the WSJ, I'm calling BS. This just doesn't add up, and I don't think Apple would screw this many customers for a few extra bucks. IMO, they'd lose more in iPhone 5 sales than what they'd make from Sprint!
 
arn

arn

macrumors god
Staff member
Apr 9, 2001
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TimUSCA said:
I'm really torn right now... on one hand, it's the WSJ. They speak volumes and don't usually open their mouths unless they're very sure of their sources.

On the other hand, I can't believe Apple would do this. There isn't a single iPhone 4 user out there that has completed their 2-year contract with AT&T or Verizon. They'd be pissing in the faces of every single iPhone 4 user by not allowing them to upgrade without a ton of hassle.

As much as I trust the WSJ, I'm calling BS. This just doesn't add up, and I don't think Apple would screw this many customers for a few extra bucks. IMO, they'd lose more in iPhone 5 sales than what they'd make from Sprint!
Click to expand...

Note there are 2 rumors here.

1. WSJ: Sprint committing $20 billion to Apple
2. BGR: Sprint as an iPhone 5 exclusive

They are separate sources, and honestly, of separate believability. But tied together in reasoning. Sprint is supposedly paying this $20 billion to get exclusivity.

arn
 
seven2k7

seven2k7

macrumors member
Jan 9, 2007
56
29
TimUSCA said:
I'm really torn right now... on one hand, it's the WSJ. They speak volumes and don't usually open their mouths unless they're very sure of their sources.

On the other hand, I can't believe Apple would do this. There isn't a single iPhone 4 user out there that has completed their 2-year contract with AT&T or Verizon. They'd be pissing in the faces of every single iPhone 4 user by not allowing them to upgrade without a ton of hassle.

As much as I trust the WSJ, I'm calling BS. This just doesn't add up, and I don't think Apple would screw this many customers for a few extra bucks. IMO, they'd lose more in iPhone 5 sales than what they'd make from Sprint!
Click to expand...

Got to take into account all the 3gs people. They want market share. Right now T-Mo and Sprint are the only carriers not carrying the iphone. That alone are millions of users.
 
M

mbarriault

macrumors regular
Dec 3, 2008
109
0
I'm going to call bull. Apple went with AT&T because they were the only carrier in the US using the same tech as the rest of the world. Verizon and Sprint's CDMA choice is dying, Sprint's further choice of WiMax is entirely proprietary, and the only other carrier using tech compatible with T-Mobile is the very small Wind Mobile in Canada.

If there is a true 4G iPhone, you can bet it's going to be LTE and not something that can only ever be solid in the US.
 
M

Mac American

macrumors newbie
Apr 12, 2011
20
0
Wow, say hello to the largest carrier in the US. The WSJ doesn't usually speculate, so I have a good feeling their is some substance to this rumor. Time to buy stock, now is Sprint publicly traded, off to find out.
 
basesloaded190

basesloaded190

macrumors 68030
Oct 16, 2007
2,693
5
Wisconsin
Agreed. The WSJ doesn't write things just to get "clicks." I have a hard time not believing this, but whether it's about the 5, who knows.
 
neiltc13

neiltc13

macrumors 68040
May 27, 2006
3,126
19
Apple sells more iPhone units outside the United States than it does inside. So why is every article about iPhone 5 focused on US networks and technologies that are rarely seen outside that country?

TimUSCA said:
I'm really torn right now... on one hand, it's the WSJ. They speak volumes and don't usually open their mouths unless they're very sure of their sources.

On the other hand, I can't believe Apple would do this. There isn't a single iPhone 4 user out there that has completed their 2-year contract with AT&T or Verizon. They'd be pissing in the faces of every single iPhone 4 user by not allowing them to upgrade without a ton of hassle.

As much as I trust the WSJ, I'm calling BS. This just doesn't add up, and I don't think Apple would screw this many customers for a few extra bucks. IMO, they'd lose more in iPhone 5 sales than what they'd make from Sprint!
Click to expand...

Sorry, you've lost me. How does another carrier offering iPhone decrease the number of potential sales that Apple can make?

Apple's sole aim is to sell as many of these as possible and make as much profit as possible. Do you honestly believe Apple considers users who are "stuck on contract" when they choose to release a new phone? You signed the contract.
 
spblat

spblat

macrumors 6502a
Jun 18, 2010
968
0
arn said:
Note there are 2 rumors here.

1. WSJ: Sprint committing $20 billion to Apple
2. BGR: Sprint as an iPhone 5 exclusive

They are separate sources, and honestly, of separate believability. But tied together in reasoning. Spring is paying this $20 billion to get exclusivity.

arn
Click to expand...

Whoa. Can $20 billion buy iP5 exclusivity? Do you still think it's just going to be a 4S? I reluctantly do.
 
W

whawhat

macrumors 6502
Jun 9, 2006
316
46
With Apple expanding the number of carriers that carry the iPhone worldwide, why would Apple take a step backward and make there #1 money making product available only on Sprint? It makes no sense.

Sprint carrying the iPhone starting Oct. 4th makes more sense.
 
N

nickpro

macrumors regular
Jun 11, 2007
183
41
Bay Area
AT MOST Sprint will have the benefit of 4G wimax over the verizon and ATT iPhones, but thats about it. no way in hell would Apple give them the exclusive "iPhone 5" redesign phone. no way.
 
MacSince1990

MacSince1990

macrumors 65816
Oct 6, 2009
1,347
0
#1... $30b? Holy hell.

#2... There will be blood if this is true. Which I'm sure it's not, but ugh, what an awful idea.
 
L

LordJohnWhorfin

macrumors regular
May 28, 2002
166
37
Go Sprint!

I will be so thrilled to tell AT&T to go stuff it. I'm so sick of their high prices, shenanigans, political contributions to extreme right politicians, but most of all abominably unreliable service. I'll switch back to Sprint the minute they offer the iPhone.
 
A

addicted44

macrumors 6502a
Jun 6, 2005
533
168
mbarriault said:
I'm going to call bull. Apple went with AT&T because they were the only carrier in the US using the same tech as the rest of the world.
Click to expand...

That isnt true. Apple went with AT&T (actually, Cingular) because they were the largest carrier that said yes to them. They approached Verizon first.
 
bb426

bb426

macrumors 6502
Jun 7, 2011
421
132
California
If that's true... PURE BULLS**T!!!

I'd rather NOT have a redesigned iPhone 5 if that's the case. I will NEVER switch to Sprint no matter what. There's no way this is legit.

Tomorrow cannot come any slower.
 
3

3460169

Cancelled
Feb 18, 2009
1,293
212
So, every single existing iPhone customer (in the US) would have to switch carriers to get at this new hardware on day one? If true, talk about Cupertino shafting their loyalists. Smells like a load of BS.
 
chrmjenkins

chrmjenkins

macrumors 603
Oct 29, 2007
5,325
158
MD
If this is all true and it actually works for Sprint, Hesse is going to need a wheelbarrow to cart his massive balls around in.
 
W

webman2k

macrumors member
Apr 8, 2004
83
0
I would have an easy time believing that Sprint would be willing to do this, but Apple? All those - what was the poll? - 95% of current iPhone owners would want to upgrade? That's an awful lot of customers that wouldn't be able to upgrade. I don't think Apple would miss out on that many sales.
 
L

LinksAwakener

macrumors regular
May 31, 2011
114
0
This just seems like a totally off-the-wall rumor. Although, *if* Sprint is indeed getting an exclusive 4-6 month lead on the iPhone 5, I can see why they'd bet the company on that.

Also I just learned something about myself. That I'd be entirely willing to switch to Sprint if it means getting a redesigned iPhone. :eek:
 
B

britboyj

macrumors 6502a
Apr 8, 2009
814
1,086
I call BS on the exclusivity part of this. It's also WAY late in the game. If this were the case, we'd have heard about it by now either by now.
 
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