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Sprint Bets Big On the iPhone
hazytodd was one of several readers to tip news of Sprint Nextel's plan to grab a piece of the iPhone action in order to halt the company's downward slide. According to a Wall Street Journal report, Sprint has committed to buying 30.5 million iPhones over the next five years (summary of paywalled WSJ story), which at retail rates works out to roughly $20 billion. "To sell that many iPhones, Sprint would have to double its rolls of contract customers, convert all of them to the Apple device or a combination of the two." A separate rumor at Boy Genius Report suggests the iPhone 5 may be a Sprint exclusive until sometime next year, with Verizon and AT&T getting the upgraded iPhone 4S until then. Apple is holding an event to unveil the new phone tomorrow.
In other completely unpredicted news...
Someone can't do math. $20,000,000,000 / 30,000,000 phones = $6,666.67 per Iphone. I don't think so.
Guess they're banking on the public loving apple, let's see how that bet holds out.
I think $20B is out to lunch though, I'd expect bulk rate if I ordered 30 MILLION widgets.
Sent from my PDP-11
I wonder how many towers $20 billion would buy, so that Sprint might actually be a choice around here, instead of the joke option you pick when you don't want to own a cell phone that can actually receive calls? Or browse the Internet? Or be anything but a waste of power?
I mean, shit, AT&T has better coverage where I live than Sprint does, and AT&T is shit! Everyone I know is on Verizon because Verizon owns the only network that bothers covering the area.
Now I'm sure that varies from place to place, but - well, in the northeast at least, Sprint is an absolute joke as a cell phone provider. That $20 billion would have been better spent on improving their network than blowing it on phones.
...when they force a pen into my cold, dead hands and wiggle my fingers to draw an 'X' ...
...over where I wrote in big, bold letters NEVER A CONTRACT AGAIN!
Seriously. I get by rather well on a stupid phone with pay as you go, though I did have a run-in this morning with the scum who subscribe people into their 'Love Genie Tips' - Wise Media, I think they are called. Watch out for texts which enroll you into their program and cell providers actually allow this sort of crap.
A feeling of having made the same mistake before: Deja Foobar
... that's all in. whoever made that bet should be standing up right now.
People will buy them, they'll offer 'em with long plans to keep the price down, and as the public gets dumber, and they will, more and more people will turn to the one button wipe my bum for me interface. Plus, you're not sophisticated unless you buy whats in the magazines, if you want to mate, you'll buy one.
Who keeps the same phone for five years?
Redo the math considering that people repurchase iphones every 18-24 months...
I really gotta wonder what their executives are thinking. Why not do something to earn the market share like:
Honestly, expecting the sales of iPhone to be the salvation of the company is such naive wishful thinking it's scary. It's a sign of management that has no real ideas about how to be competitive, but only how to be a "me too" provider.
I do not fail; I succeed at finding out what does not work.
...some company has made a contract with some other company based on the belief that a lot of people are going to buy mobile phones in the reasonably near future.
Meanwhile some other company are ordering a lot of flat meat-like substances based on the belief that lots of people will buy hamburgers in the near future.
Big deal!
Preview of the iPhone 5
When will a creative botnet shut down ALL cell phones?
I'm tired of the _Fill_In_Your_App_Here App for the iPhone, Android, Foo Phone.
Yours In Minsk,
K. Trout, C.I.O.
Who can't do math? 20,000,000,000 / 30,000,000 = 666.67
FWIW its 30.5M not 30M.
;-)
So 20,000M / 30.5M = 655.74.
Apologies to the Iron Maiden fans who were liking the earlier calculation.
Customers are being bitches to the agreements and schemes made in between corporations, totally without their participation or will.
Read radical news here
unlimited plans that are, well, unlimited. I really hope that they mention that talking point heavily in their advertising.
The idea of iPhone 5 being a Sprint exclusive doesn't make any sense whatsoever. Obviously it would be great for Sprint, but I don't see what Apple would get from such an arrangement, other than a horde of pissed off existing customers who have a shiny new toy dangled in front of their face and then told that they can't have it right here and now.
"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."
It sounds like someone at the board meeting was screaming "Why don't we have an iphone on Sprint!!" and CEO Hesse responded and said "We looked into it and this is what it would take." Doesn't sound like an all in bet to me.
So... does this mean Virgin Mobile will now offer iPhones to the pre-paid market?
They dont need more/better phones. THEY NEED BETTER SERVICE. I would have stayed with sprints unlimited $129 family plan forever if they gave me coverage for my smart phones. Instead I paid my way out of their contract to be with verizons horrible 2gb/m cap, if for no other reason than to actually have service/3g coverage.
And guess what, i do. 0 buyers remorse to have consistently workable phone.
My contract with Sprint is up soon and I was debating new phones. So I suppose I can look forward to the following in the time to come:
1) An influx of Iphone 5 users saturating what is now a pretty decent network in my opinion, about to do what AT&T did when they got the Iphones in (aka fall flat on their back)
2) I'm a Droid user, and awfully curious as to how well Droid is going to be supported by Sprint down the line...will they still bother to carry Droids, is anything else besides Droid and Sprint even going to be an option (aka Windows Phone 7)?
I worry....
...in bed
I call shenanigans.
Apple has had no problems selling all the iPhones they can make - so what would they gain by doing this? It seems like, if anything, they'd lose potential income, given that Sprint would almost certainly be paying less than retail.
#DeleteChrome
So Apple goes to ATT and says "Sprint's offered to buy 30 million iPhone 5s if we go exclusive with them, can you make a better offer?" ATT giggled to themselves and said "No thanks" Then promptly called a board meeting to discuss buying Sprint after their stock tanks sometime next year. They'll get all their subscribers and the Apple contract for less than the contract itself would have cost them.
- BGR says that the exclusivity will only last until Q1 2012... very short lived for a $20bil investment
- No iPhone 4 users (except people who purchased out of contract) will even be able to switch without paying a hefty penalty, making it nearly impossible for Sprint to win over a good chunk of the current iPhone users. Why is this important? Many of these people are early adopters. Luring them to Sprint for a 2 year commitment would be a huge win for Sprint. My guess is that the market for the iPhone 5 is much bigger for those that already have an iPhone 4 than those who don't. Even if the exclusivity was for an entire year, it would be just in time for upgrade window and contract ending for the current crop of iPhone 4 owners.
- Sprint is a discount provider, along with T-Mobile. They really do not compete at the same level, in terms of service and coverage, as AT&T and Verizon. People are less likely to switch from AT&T & VZW to Sprint
- For the above 2 reasons, hitting the kind of sales that Sprint needs to make that commitment to Apple seems unlikely
- The article pegs the Sprint version as a WiMAX phone. Sprint has already said that their strategic direction for 4G is LTE. Why would Apple or Sprint invest $20 billion in a technology (soon to be) in decline?
If Sprint is indeed doing this, they are betting the farm on the iPhone 5. If I was a shareholder, I'd be concerned.
In other completely unpredicted news...
a sprint exclusive would be a surprise to most people. It would fit with the conflicting stories we've heard. And it would make sense for apple too as a way to turn a negative-- limited supply-- in to a positive value--exclusivity premium paid by the carrier-- without raising the price.
this will make me sad. I can totally understand the logic if it's true. But I was so hoping that t-mobile or Verizon would get the iphone 5. We don't get sprint or aT&T where I live.
Some drink at the fountain of knowledge. Others just gargle.
$655 each?? That is more than a 3G iPad at retail.
You would think with a volume of 30 Million+, you could get a a big volume discount.
Hey sprint, Give me 2 of the new iphones at $99.00 each and the same plan as AT&T but with less suckage in coverage and 3G as well as a $20.00 a month discount on the service for the 2 years and I'll switch right now.
I'll jump ship if you make it worth my time.
and THAT is what they will need to do. make it worth my time to risk a change for a 2 year lock in. I should pay less all the way around if you want my business.
Do not look at laser with remaining good eye.
Sprint has plenty of warts, but price (at least, for individual customers with no family plan and exactly one phone who'd burn through AT&T and Verizon's caps within a matter of days and are perfectly cool with $69.95 + $10 for 450 minutes of peak airtime, and more or less unlimited everything else) isn't really something I'd classify as one of them.
Unless one is used to cellular service costing that much per year because that's what Sprint's Virgin Mobile USA offers for dumbphones, and they don't make even 45 minutes of cellular calls a month, let alone 450. People who rely on a prepaid dumbphone (such as myself) probably have POTS or VoIP at home and use the cellular network to make only urgent calls such as to arrange rides, not unlike your urban users who turn on the smartphone's Wi-Fi at home and work.
Nobody who has high-end internet access at home is going to screw around with torrenting from a tethered phone
Except perhaps people who live outside the coverage area of cable and DSL service, where nobody offers "high-end internet access at home", where the best options for home Internet are satellite and fixed 3G/4G. They're the people who should be using Qwikster instead of Netflix.
because it would be slow, suck, and annoyingly cause most of your incoming calls to end up going straight to voicemail
Then schedule your torrents to kick in between 1 AM and 6 AM, when your incoming calls were going to voice mail anyway.
Where's the PTT button?
For justice, we must go to Don Corleone
They did this because they couldn't buy Nextel again?
As a medium sized customer with ~100 Sprint/Nextel lines, I am NOT happy with this idea at all. I'd rather they keep that shit fruit phone OFF the Sprint network - Sprint isn't exactly rolling in dough, but the 3G speeds and 4G speeds are pretty impressive, for what you're paying for. We have a handful of more expensive with less contractual value from AT&T (because the CxO's who travel needed true International usage, which Sprint doesn't do very well ... and demanded FruitBars) I'd rather not see my 4G speed ramp down what we had under 1xRTT because all the fanbois had to have the newest new phone and mobbed the Sprint stores. Customer Service has gotten far better since since 2005 (because robocall you later and if you give the CSR great grades, they they spiff them) and I can't see that getting better if they double their size by Friday.
Stay over there Apple...
Sprint's is supposedly replacing their tower side gear to run EVERYTHING ...
http://newsroom.sprint.com/press_kits.cfm?presskit_id=19
The summary states "retail rates". I don't think Sprint will be paying retail price on a bulk purchase. Only a MORON would think or do that. Hell I don't expect Sprint to even pay distributor price. They should be paying direct from manufacturer price.
The only moron I can think who paid retail rates on a massive bulk purchase was Best Buy, who agreed to pay an inexplicable $8.75 per copy on a direct from pressing plant purchase of 1.6 million copies. That's a price I'd expect to pay a jobber for a one time 30 piece order, not a freakingly huge 1.6 million pieces. It's business deals like this that makes me wonder how these people are able to be hired.
Sprint is a discount provider, along with T-Mobile. They really do not compete at the same level, in terms of service and coverage, as AT&T and Verizon. People are less likely to switch from AT&T & VZW to Sprint
Citation needed.
Dude, you're not a *Droid* user unless you're on Verizon. You're an *Android* user.
Android isn't going anywhere. I'd be more worried about Sprint going away rather than Sprint (if it stays in business) dropping Android phones. If you haven't noticed, over the past couple of years, Sprint has successfully bet the company on Android. Pretty much the only reason they still are in business.
I loved Sprint's service/coverage when I was with them for 9 years. I only switched to Verizon because of the Droid 1. I hope that this resuscitates Sprint. More wireless providers = more competition and that is great news for everyone! Now if only these wireless providers would give existing customers the same red carpet treatment that new customers command.
frhdighidg
pair-bonded IDSL
IDSL is 0.14 Mbps, and if 1xRTT doesn't count, neither does IDSL.
[rural areas] where the best options for home Internet are satellite and fixed 3G/4G
No, 153kbps 1xRTT doesn't count, nor does the ability to mount a directional antenna on the roof and get fixed wireless service through Wimax.
Fixed WiMAX service is exactly what I was referring to by "fixed 4G". But I'll admit that my original comment displayed a bit of cluttered thought.
iPhones and Android phones aren't for frugal people who want to spend $12/month to make emergency calls. They're for people who live online 24/7
Some people need to run applications that are exclusive to smartphones and not available for PCs. This includes, for example, the check/cheque deposit application for an online-only bank or other bank with no ATMs near the customer. Or how would you recommend depositing a check/cheque to such a bank?
I heard advisements over the weekend from a regonal carrier in my state pushing people to buy an unlocked iPhone and bring it to them for service.
Is someone having a sale on unlocked iPhones?
if these phones makers dumped the exclusivity-amongst-carriers shenanigans?
...
I thought that the internet was supposed to cross borders and stuff...
I know from Slasdot that Sprint is a US mobile phone company, but... how are they going to have an exclusive on a product that is sold world-wide, in countries where Sprint doesn't operate, like here in Japan?
Is it so hard to add "in the US" when you mean that? Anyway, the rumors here are that Au might start offering the iPhone soon (Currently it is just Softbank Mobile who provides service for Apple devices officially).
This is a number WSJ pulled out of their ass from guessing the unlocked price multiplied by the number of phones Sprint supposedly is going to buy. No no company is going to pay retail price on a multi-million piece order.
If you want to sell 30 billion iPhones over 4 years, you do this:
- 2 million in 2012
- 4 million in 2013
- 8 million in 2014
- 16 million in 2015
the reason it is easy is that iPhone sales double organically every year. The same effort that you put in to sell 2 million in 2012 results in 16 million sales in 2015.
This is a very minimum commitment, and for a carrier that runs a nonstandard network, they are lucky that Apple made them a CDMA phone at all.
Yes, iPads are cheaper than iPhones. That is because low-end PC's cost less than high-end smartphones.
They are not buying in volume. There is no way that Sprint wrote a $20 billion check to Apple and won't pay them anything again for 5 years. They will pay as they go.
There is no $20 billion investment. It is $20 billion over 5 years. That is only $4 billion per year. If that sounds large, remember that iPhone sales just double all by themselves every single year. If you think Sprint can sell n iPhones in 2012, then they can sell 2n in 2013, 4n in 2014, 8n in 2015, and 16n in 2016. They could easily sell over 20 million iPhones in 2016 all by themselves.
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- Sprint is a discount provider, along with T-Mobile. They really do not compete at the same level, in terms of service and coverage, as AT&T and Verizon. People are less likely to switch from AT&T & VZW to Sprint
The service quality and coverage on my Sprint phone is better than just about everyone I know with an ATT phone and comparable/better than those with Verizon, so I'm not sure what you mean. Beyond that if I can't connect to a Sprint tower and have to go out of network I don't mind - roaming is free on Sprint. In 7 years of Sprint I've had 1 dropped call, which I am able to count because it surprised me so much.
Sprint may have agreed to such a high price in exchange for exclusivity. In this way, Sprint would be assuming the risk and Apple fanatics can still get their toy at the same price point. Apple is pretty sure at this point they can put their shiny toy on whatever network(s) they wish and customers will follow the device and not the network.
If they had a 6 month exclusive lock on it, it may well be worth it. Apple users tend to do *anything* to get the new toy, ETFs and all.
XML is like violence. If it doesn't solve the problem, use more.
Because Sprint's LTE isn't ready.
I have a friend that works for Sprint, is pretty high up in the company, and he posted on facebook yesterday, that big news was coming on Oct. 4th.
21st Century Renaissance Man
Agreed. I'm sure it varies in different parts of the country, but where I live and work, Sprint has the best coverage of any carrier. I work in an old building that's absolute murder on cell signal. There's huge dead zones all over - unless you're on Sprint.
Now, throw a bunch of iPhone users on and we may see coverage crapping it's pants just as badly as AT&T.
Redundancy is good And also good.
- Sprint is a discount provider, along with T-Mobile. They really do not compete at the same level, in terms of service and coverage, as AT&T and Verizon. People are less likely to switch from AT&T & VZW to Sprint
The only thing discount about Sprint compared to AT&T is the price.
Apple can't stand data caps and throttling for their shiny phone. Sprint is maybe the last carrier to not have those. Therefore, it's the best option. That's why Apple is kind to this idea. Remember AT&T dumping their unlimited iPhone plan and everyone being so furious? Verizon throttles their top data users, IE their biggest customers now. This is the result. Sprint is killing IDEN and moving to LTE gradually, so there will be much less overhead during a move like this without having to run the costly and archaic IDEN network anymore. Honestly it makes sense and is ultimately a good idea for both companies. People may be less likely to move over immediately because of contracts, but leaving any blind allegiance to corporations that could care less about them, they will definitely take note of the fact that unlimited is still a real thing at Sprint.