Sprint has to pay Apple $15.5 billion for the iPhone, says it needs $7 billion
0. phoneArena 27 Oct 2011, 04:30 posted on
Sprint has finally spilled out the details of the gigantic bet it's taken with Apple's iPhone. The nation's third-largest carrier has obviously inked a four-year agreement with Apple, under which the Sprint has to pay $15.5 billion…
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3. ps1001 (Posts: 65; Member since: 14 Dec 2010)
"no... sprint is going down sooner rather then latter..."
18. threeline (Posts: 267; Member since: 11 Sep 2011)
"Sprint, you can't handle the truth!" (Siri in Jack Nicholson's voice)
37. jogutier (Posts: 324; Member since: 12 Feb 2010)
I agree, and Verizon is ready to purchase them. Especialy cause Sprint is making it easier by upgrading their towers to LTE. LOL
51. jsjr76 (Posts: 24; Member since: 28 Sep 2010)
Sprint isn't going down any time soon OR later. They are making themselves a more valuable company by carrying the iPhone because the damn thing sells like water in the desert. People don't stand in lines for Androids and they rarely sell out. IPhones??? ALL THE DAMN TIME. Its a smart move and I think a man like Dan Hesse commands a little respect. Undegrad from Notre Dame...MBA from Cornell...MSc from MIT... the man is damn smart and hes kept this ship going when it almost sunk before he took over. He said to give him 5 years and in a year and a few months it will be five years. In that time he has earned more awards for customer service, call quality, and data transfer reliability than in the previous ten for Sprint. He grabbed two of the biggest phones in history (EVO 4G and the iPhone) and he's rolling out LTE in 2012/2013. And Verizon can't buy them. It'll violate anti-trust laws. However, its been said that a European company is looking, as are a few American suitors. So don't count Sprint out. Mr Hesse is doing exactly what he said he could and would do. Being expensive and arrogant doesn't make VZW or Crap T&T better. Last time i checked AT&T ranked dead last in 19 out of 25 major metropolitan areas. Sprint? NONE
54. mooney73 (Posts: 9; Member since: 18 Oct 2011)
It doesn't take an Ivy League sheepskin to recognize the irony of taking out a loan, ultimately sourced from China, that will be used to purchase the right to peddle disposable consumer goods, ulitmately sourced from China.
I'm sure there were some "impressive" diplomas hanging in the executive offices of AIG, Goldman-Sachs, GM, Chrysler, and more...
Borrowing the equivalent of your market value to make a purchase in that sum for the right to sell the products of a company who just lost their executive and creative leadership sure sounds like a "hail Mary" play to me... a move that Hesse -- or any Notre Dame grad/fan -- knows all too well.
59. threeline (Posts: 267; Member since: 11 Sep 2011)
Yes, this was a bad move for Dan H especially for a refreshed version of the iPhone and not the iPhone 5. Most of their new customers will be stuck with the 4 or 4s and the people who were on the fence about getting a Sprint iPhone like me(10 year sprint customer) has made the decision to stay with Android especially after seeing ICS. I don't miss what I never had. Android comes on so many different phones, and people like that.
Dan H should've held out longer because Apple kind of needed Sprint as well because Apple needed access to Sprint's 50mil customers to compete with Android knowing they didn't have a new model to release this year and Moto, HTC, and Samsung was loading the guns with killer high-end devices and Apple had nothing new this year. So they could've made Apple craw to them had they played their cards right buy saying if you want access to my customers then make me a killer offer because we are gonna be okay without the iPhone as long as we keep a great selection of high-end Androids. VZW didnt sell their soul, but they have a balanced attack with both the 4 and 4S and a ton of Androids from entry level to Super high end dual-core models. Sprint should've waited for the iPhone 5 and focused on Android for now, their bread and butter.
7. lubba (Posts: 1313; Member since: 17 Jan 2011)
This is by far the best comment ever! Lolzzz!
14. andro. (Posts: 1997; Member since: 16 Sep 2011)
once you get into agreements like this with apple its game over,they like to swallow people whole and spit out the bones......while also pocketing all their money,islaves get this treatment all the time
35. JeffdaBeat (unregistered)
I don't think it's really that more than Sprint has to prove that it isn't some poor man's company. That the struggle T-Mobile is having as well. No one takes "pride" in carrying T-Mobile and rarely is that the case with Sprint. In order for Sprint to compete, it has to have the same offerings as its competitors. Whether or not you like the iPhone, people want it. And Sprint not offering that gives their customers one choice if they do want it...switch. Sure, not having it isn't going to make everyone run away from Sprint, but it can make a few million people leave year after year. That's not good for stocks at all...
Still this is a Hail Mary pass like I've not seen in a while. Sprint needed the iPhone to help perception, but to bet so much is either going to bring them back or kill the company now and forever...especially bettering with more money than they have. Good luck Sprint, I for one hope you win.
52. SuperEd (Posts: 132; Member since: 18 Oct 2011)
Bye bye SPRINT. They are going to go down HARD. Windows Phone is going to put the nail in the coffin. oh well.
2. The_Miz (Posts: 1496; Member since: 06 Apr 2011)
Well Sprint wanted the best phone on the market.
5. Whateverman (Posts: 3251; Member since: 17 May 2009)
Yeah, but they'll had to settle for the iPhone 4S instead, because the Galaxy Nexus is going to VZW. Com'on, its okay to laugh. You know I gotcha! :)
17. threeline (Posts: 267; Member since: 11 Sep 2011)
I was told by a Sprint Sales Rep that they were getting a phone identical to the Galaxy Nexus called the Droid Prime sometime next year. He seemed pretty sure about it, but then again he prolly didn't think he was talking to someone that has actually been scouring the net looking for any info possible of the GN going to Sprint. I dont want to wait until next year because other ICS phones will be coming out and I think now updates will be much easier for manufacturer's to deliver because they're gonna start easing up on the skins, i.e(Sense, TouchWiz) with ICS. I would get the Droid Razr or Rezound if I was on VWZ.
22. BuckeyeCadet86 (Posts: 77; Member since: 26 Oct 2011)
Verizon does have an exclusive on the Galaxy Nexus, but it is only an exclusive window. Sprint will not ever get a phone called the "DROID Anything" because Verizon holds the exclusive contract with LucasArts for the branding rights.
16. The_Miz (Posts: 1496; Member since: 06 Apr 2011)
Do you realize how wong you are? The Galaxy Nexus is not VZW exclusive. Plus the iphone 4s IS the best phone on tge market to a lot of people.
36. crankyd00d (Posts: 191; Member since: 17 Oct 2011)
In United States it is a timed exclusive. If you're going to point people wrong at least get your facts straight, I mean we all know you're always wearing your Apple Blinders® but too much of anything is not good for you, especially for your brain
47. The_Miz (Posts: 1496; Member since: 06 Apr 2011)
That doesn't make it any more exclusive than the Galaxy S2 was on Sprint. Maybe you should focus more on facts and less on using predictable insults.
Btw, those that are thumbing my comments down, keep doing so. You're only proving me right and you certainly aren't hurting my feelings lol.
6. Sniggly (Posts: 7305; Member since: 05 Dec 2009)
Anyone who ever doubted me when I said that Apple takes the carriers to the cleaners, please feel free to admit you were wrong starting now.
39. taco50 (banned) (Posts: 5506; Member since: 08 Oct 2009)
You're wrong. No one forced Sprint into this deal. They begged for it. CEO says "it's worth every penny"
43. Sniggly (Posts: 7305; Member since: 05 Dec 2009)
Did I say that this was a forced deal? No. Did I say that Sprint doesn't think the deal is somehow worth it? Nope. All I said was that holy s**t, Apple is definitely getting the far better end of the bargain here.
48. The_Miz (Posts: 1496; Member since: 06 Apr 2011)
It's clear up above what you said, Sniggly. Just acknowledge it rather than backpedal on it.
53. Sniggly (Posts: 7305; Member since: 05 Dec 2009)
I am acknowledging what I said. Sprint agreed to a deal where Apple will benefit far, far more than Sprint will. It's like overpaying for a used car: you think you're benefitting, you agreed to the deal voluntarily, but you got the short end of the stick while the used car salesman laughs all the way to the bank.
8. redflag_rising (Posts: 20; Member since: 26 Oct 2011)
sprint have just acquired the iphone as their saver... ceo dan himself admitted that the reason of the thousands of post paid churn are because of the iphone.. not the best phone but one of the most popular... sprint have a lot of phones that are great and much better than the iphone...
10. arcq12 (Posts: 733; Member since: 13 Oct 2011)
I agree that iPhones can snag some gross add sales for Sprint but in my opinion, it shouldn't be prioritized. Better network implementation and enhancements should be prioritzed. It's one of the biggest reason why customers are leaving, and less gross add sales because a lot more areas aren't covered. They have the most value and best plans around but it's useless if they do not cover more as much as AT&T and Verizon do.
40. taco50 (banned) (Posts: 5506; Member since: 08 Oct 2009)
Well according to their CEO you're wrong. People were leaving for the iPhone.
I guess you have better insider knowledge then him.
50. arcq12 (Posts: 733; Member since: 13 Oct 2011)
taco you know nothing, it's just a part of Hesse's ceremony. because he really wants the iPhone on his network.
And in reality, no one will go to a network with a great phone and has no signal. effin useless.
11. warlockz (Posts: 156; Member since: 10 Oct 2011)
Thats a lot of tied up capital plus they have to borrow 7 million more risky
12. Stoli89 (Posts: 333; Member since: 28 Jun 2010)
Sprint bet the farm on the success of somebody's else brand AND with NO exclusivity nor first adopter advantage. Dump the stock. Fire the management. This horse is doomed.
13. lubba (Posts: 1313; Member since: 17 Jan 2011)
Siri says, "good luck Sprint and thanks for giving me $15.5 billion."
19. leefer77 (Posts: 23; Member since: 04 Jan 2011)
Sprint should have invested this kind of money improving the network. Instead they sink it into a phone that is months behind top android phones. iPhone has Siri but Android has had Vlingo for a while. Android has been using dual core processors and 8 mp cameras. Yes, it is a good phone and popular, but Sprint could probably have put that kind of money to better use.
25. Tottenham (Posts: 86; Member since: 05 Jan 2011)
To leefer77 and all who rag on Sprint spending the money to acquire the iPhone (although it does seem like a grossly lopsided deal), even though many commenters may consider it to be "months behind top android phones", the simple fact is millions of people want the iPhone, and no other phone will do for them (I am not in that category). Sprint's all you can eat data (on smart phones) is a big draw, but w/o the iPhone it was losing out on a lot of customers that would just not be satisfied with anything else.
I mean, if a person goes to a store to buy an iPod, and the store doesn't have it, no matter how many other MP3 players that store might have (some that others consider superior to the iPod) , most people that want the iPod will just go to another store to get what they want.
42. redflag_rising (Posts: 20; Member since: 26 Oct 2011)
correct .. no question about that iphone did help gross sales for sprint and moving forward.... you could go to sprintusers.com and see a lot of threads dated months and years ago even before the apple deal,
that the main reason customers leave sprint are ...
#1 iphone not on the now network
#2 lousy network and coverage issues....
20. superguy (Posts: 293; Member since: 15 Jul 2011)
And Sprint thinks it'd have the money to buy T-Mo? $22 billion in the hole between LTE and iPhone, and they thought they had another $19 billion to acquire T-Mobile?
I'd like some of whatever Hesse is smoking.
27. snowgator (Posts: 3558; Member since: 19 Jan 2011)
Dude, you are smoking it. Sprint was in informal talks to buy T-Mobile, but it never went past that due to capital funds, wrong tech, the type of deal it would have to be, ect, ect. They could never have pulled off the deal, and they called off the talks with T-Mobile's parent company. Sprint is fighting it tooth and nail because they do not want AT&T to get that much of an advantage in subscribers and towers and all the bandwidth T-Mo has.
21. redflag_rising (Posts: 20; Member since: 26 Oct 2011)
sprint have invested into network enhacement remember their conf last 3 weeks ago.. clearly states that they would bump up the network and roll out lte as well.. but on the bad part of that customers that would be affected of the network vision would be having the worst reception as the towers were changed....
the iphone deal is just their lifeline so that they could do business until the expected rollout and they could match up to the competition....
23. BuckeyeCadet86 (Posts: 77; Member since: 26 Oct 2011)
So Sprint's broke and they if anything goes wrong with their network vision plan they will go belly up. They just should have passed on the iPhone and focused on Android and WP7 and fixed the network. I work at Verizon and we have had a huge bump in activations porting in from Sprint, all of them say their coverage is horrible and thats why they are switching, most of them get iPhones!
26. KineticArc (Posts: 11; Member since: 29 Jun 2011)
My concern is with Sprint's debt. I understand this is business and in order to progress, you need to spend capital in order to innovate. However, at this point, Sprint is merely attempting to catch up to AT&T and Verizon. Personally, I was contemplating switching to Sprint from Verizon (as my opinion is that Sprint's family plans are cheaper than Verizon's), but with the recent news of Sprint's increasing debt, I am reconsidering them as an alternative. High debt and low income usually translates to poor quality of service, customer resentment, and higher probability that irregularities could cause excessive disruption. This eventually leads to bankruptcy, since customers will eventually grow weary of the inconsistencies and frustrations of the organization. Currently, the debt to equity ratio for Sprint is double than Verizon and AT&T. Granted, Sprint is smaller. However, Sprint needs to live within its means. I feel they are taking on too much in such a small amount of time. To me, this means I have a higher probability of receiving service problems (customer and hardware service), among other issues, and thus, am reconsidering them as an alternative to my Verizon account.
I can't help but wonder if there are others who feel the same as me. I want Sprint to succeed, as competition is excellent for the consumer, but am unwilling to sign a contract with an organization with significant debt (but others may be). I believe all consumers should treat contract renewals as job interviews. Review of an organization's finances (as boring and murky as it can be), future plans, and past track record should be included in the customer's decision to sign a contract. This doesn't mean all consumers should spend their cash only on Verizon and AT&T. It simply means signing a 2-year contract with an organization is a big deal. It means for the next two years, you have to live with your choice. So review of the health of the organization is important. And my personal view is that Sprint at this time, looks unhealthy.
28. snowgator (Posts: 3558; Member since: 19 Jan 2011)
You are not alone. I reconsidered them as well. But most mobile consumers do not follow this type of news, and Sprint has a great chance for a short term growth. Long term, they are in quite a pickle. They now have no room for error. Danger, Will Robinson, Danger...
29. ngo2dd (Posts: 896; Member since: 08 Jul 2011)
For all the people who talk about network, you people have no ideal what you talking about. All sprint smartphone plan include roaming off Verizon voices and data. So the only time sprints have bad service is when both Sprint and Verizon have bad network. The Iphone is helping keep sprint people with sprint.
46. tigermcm (Posts: 851; Member since: 02 Sep 2009)
you and I are probably the only ones that know about this
63. choupino (Posts: 69; Member since: 28 May 2011)
You must be in the same boat with ngo2dd... Lol
62. choupino (Posts: 69; Member since: 28 May 2011)
YOU ARE ACTUALLY INCORRECT MY FRIEND... IT IS YOU THAT NEEDS TO PERFORM SOME RESEARCH.
Sprint and Verizon are both CDMA carriers. However, they both have different frequency ranges.
It is a known and scientific fact that the lower a frequency in the wireless spectrum, the easier it is for that frequency's signal to permeate through walls and solid materials, like metal and concrete(VERIZON).
Higher frequency's in the spectrum make the signal go further but they are not able to go through metal and concrete as far(SPRINT).
That is why people with Verizon can get almost perfect service in an apartment building or other heavily enclosed areas and Sprint customers have difficulty doing the same. There are positives and drawbacks to both ends of that wireless spectrum issue for each of those carriers.
The iPhone is a great device but seriously is not enough for Sprint to hedge such a bet on it's success.
I don't believe the iPhone was an actual gamble but rather a way to stop the hemmorhaging of it's customers leaving for the iPhone.
Let's call the iPhone deal Sprint's attempted "STOPLOSS" of it's customers.
30. chip20032 (Posts: 3; Member since: 14 Jan 2009)
I see sprint selling out to google or apple....because both companys want there own network and they thrive on buying up companys.....but most likely would be apple because they have created this large debt they will not be able to repay... because they need to much work to there "networks and service " they have went in over there head this time....first it was nextel,then clearwire, now apple...they do not know what direction they want to go....and they keep losing more money on flawed investments...I would not bet my business on apple...espically when android has been so sucessful for the company,and has a broader and larger audience...for god sake there are 4 androids activated for every 1 Iphone...the first thing they should have done is improved there network and service...that right there is the key to bring back customers....then provide top of the line phones....but no.....they want to invest the whole company on one phone...and sorry coverage...in fact where i live the iphone is so sorry I did a speed test and my so called 3gs is barely moving at the blazing speed of .88kb per second....come on sprint it doesnt take much to figure out what draws customers and how to make proper business decisions...right now wasnt the time to launch the iphone...good bye sprint
31. chip20032 (Posts: 3; Member since: 14 Jan 2009)
and btw who would finace 15.5 billion dollars in debt in this day and time...are they crazy or stupid...i just dont see where that money will come from...so go ahead and sing a swan song for them
33. Johnny_Mnemonic (Posts: 240; Member since: 05 Oct 2011)
Sprint thought that iphone could safe them SURPRISE SURPRISE iPhone is digging the grave for Sprint
41. taco50 (banned) (Posts: 5506; Member since: 08 Oct 2009)
iPhone 4S was their best selling device ever on opening day. Does what happens in real life even matter to you?
45. Johnny_Mnemonic (Posts: 240; Member since: 05 Oct 2011)
I don't care about Sprint or iPhone what I don't like is that iPhone is taking advantage of Sprint sorry Sprint you made a bad move sleeping with the enemy. Jajjaja
61. redflag_rising (Posts: 20; Member since: 26 Oct 2011)
we couldnt yet tell that its a bad move or not .. . time would tell if sprint would beneift from the iphone deal or apple just earning more revenuefrom the deal...
based on the Q3 reports of sprint nothing have changed to their benefit ... but lets see with the Q4 results....
44. downphoenix (Posts: 3155; Member since: 19 Jun 2010)
The iphone was a bad deal for sprint. They paid apple $200 more a phone than AT&T and Verizon? LMAO. They are losing a lot of money on each iPhone sale, without an iPhone customer being more profitable. They should have screwed the various changes that punished all customes and targetted the iPhone customers specifically with additional charges, maybe have a 72$ act/upg fee for iPhones only, maybe the premium data be $20/mo instead of $10/mo, make the early upgrades only apply to non iPhone devices, something of that nature, rather than be content with paying $200/device more than your competitors and spread the punishment equally.
49. remixfa (Posts: 14255; Member since: 19 Dec 2008)
wow, ol Steve-o got Dan over a barrel before he died. what a huuuge freaking mark up on an already expencive device.
Apple was already making 70% per regular iphone4s sold. That means they are making nearly 110% for every sprint iphone sold
thats insaaaaaine. OMG.
well, ya gotta love apple's ability to get crazy prices.
55. downphoenix (Posts: 3155; Member since: 19 Jun 2010)
well the iPhone cant save all customer losses. Im currently overlooking my options on cancelling my sprint service and going with t-mobile. Price is king for me, iPhone isn't even in the running.