Sprint to bet the farm on a $20 billion Apple deal over the next 4 years, iPhone 5 exclusivity in tow?

Sprint to bet the farm on a $20 billion Apple deal over the next 4 years, iPhone 5 exclusivity in tow?
Wall Street Journal is reporting the staggering rumor that Sprint has locked itself into a deal with Apple to buy 30.5 million iPhones from it over the course of four years, which, at north of $600 ASP for the iPhone 4 in the last quarter, amounts to about $20 billion.

CEO Dan Hesse thinks that Sprint has a strong franchise and great customer service now, and only the lack of an iPhone version in its lineup is the reason behind customers defecting to other carriers. In order to assimilate so many iPhones, Sprint will have to double its contract subscribers, or convert the current ones to Apple fandom. In reality it will probably have to be a combination of both. An analyst predicted recently that Sprint might sell as many as six million iPhones next year, but that was before the rumored $20 billion deal with Apple

It is hard to imagine such a plunge by CEO Dan Hesse, which will make Sprint subsidize each iPhone with about $500 and then aim to recover costs over the two years of the contract without some sort of exclusivity over the iPhone 5. The sources say that the CEO himself said Sprint will be in the red on the deal until 2014. Sprint explicitly told its employees to be hush-hush about the iPhone arrival on its network, while working on things like upgrade fees and shorter contracts. If the unlimited data stays, however, it will be a great sticking point for new or current customers as well. 

An early exclusivity boost on the iPhone 5 could just give Sprint that initial headstart it will need to make whole on the $20 billion bet. And indeed, another source points out something that seemed unbelieavable at first, but now makes much more sense - that Sprint will have a WiMAX-enabled iPhone 5 in its portfolio announced tomorrow, and will keep the exclusive rights to sell it until LTE versions appear on AT&T and Verizon next year. Let's not forget Sprint is also planning to go the LTE-way.

The international version is still expected to sport an HSPA+ 4G radio, while the other US carriers will have to make do with an upgraded iPhone 4 in the meantime, and its combined GSM/CDMA chip. The iPhone 4S is said to sport a slightly underclocked A5 silicon, 8MP camera on the back and "HD" front-facing camera, plus NFC chip and metal or quality plastic back.

The Sprint-only iPhone 5 that might be unveiled tomorrow, is expected to feature a boosted A5 chip, larger 4" display of the bright LG NOVA sort, but with higher resolution, 32GB of memory and a larger battery, plus the exclusive for the phone voice recognition integration dubbed Assistant.  

Surprised about these eventual developments, or do you think this actually makes sense and ties the rumors nicely together?

source: WSJ & BGR

FEATURED VIDEO

78 Comments

1. Galen20K

Posts: 555; Member since: Dec 26, 2008

wow, didn't expect this one... lol

15. Kjayhawk

Posts: 294; Member since: Oct 07, 2010

If sprint did manage to pull off this deal DAMN!!!! thats exactly what sprint needs, the iPhone. I really want this to be true! I'm leaving sprint, for Verizon. But it would be very cool to see sprint have an exclusive to the iPhone and see Verizon have the Nexus Prime! See them go head to head... Of course the iPhone would obliterate the Nexus Prime. But still it would be cool to see. I guess we will figure out tomorrow what happens.

21. Dj21o

Posts: 437; Member since: May 19, 2011

"Of course the iPhone would obliterate the Nexus Prime." Are you stupid? Barely anything is changing on the iPhone 5. It will look just like all of the other iPhone models. :)

22. oddmanout

Posts: 443; Member since: May 22, 2009

@Dj21o and you know this how???

27. Yeeee

Posts: 190; Member since: Aug 02, 2011

because of all the leaked specs.

28. Dj21o

Posts: 437; Member since: May 19, 2011

Dude look at the 4 iPhone models they have released. The ui looks the same. The screen is so damn small. They upped the speed a little in each one, but that is it. For someone to say it will obliterate the Prime (which isn't even out yet), is stupid. I think you are asking the wrong person how they know anything. I give it a speed improvement, but that is all. Maybe a little better battery. It is so damn boring. But everyone has a different opinion and I respect that. People just sound stupid.

37. thethingis unregistered

The thing is.. it WILL obliterate the PRIME in sale. I hate to say it, being a huge Android fan, but it's true. Apple marketing will make this thing sell, sell, and sell.. just the fact that it's a new model will have people screaming for one. That's how apple has consumers thinking right now. There are those of us that follow this stuff and see the PRIME as a better phone (subjective), but the vast majority of the consumers have sold into the fact that the iPhone is the holy grail of phones. period. For me.. I'm waiting and almost 100% locked in on the PRIME. I can't wait to get it!

57. Dj21o

Posts: 437; Member since: May 19, 2011

Yeah man, I'm excited for you to get ICS. That is going to be amazing. I bought the GSII, and I am still amazed at how fast and smooth it is. I can't wait to get it ported over to my phone. I have the honeycomb lockscreen and I am in love with it lol. No doubt in my mind, Google will bring the asskicking with ICS.

69. taz89

Posts: 2014; Member since: May 03, 2011

no phone will come close or match the iphones in sale...apple have too much fans and have great marketing...but hey like you im waiting on the prime but till then im more than happy with my gs2 and iphone 4 combo....more sales does not mean better...

67. Kjayhawk

Posts: 294; Member since: Oct 07, 2010

Who ever thinks the prime will out sell the iPhone is f**king stupid. And to think it will come even close is just as stupid

72. Dj21o

Posts: 437; Member since: May 19, 2011

The thing is, is that people were waiting for an amazing android phone. The galaxy S II did just that. There are very few (patient) people that are waiting for it. I couldn't bare my Evolution any longer, and my phone is all rooted for ICS to get ported over. Even then, I might keep this phone the way it is. It is just the fact I have options, not just waiting for Apple to release the new updates. And that is is all IOS 5 is. Call it innovative etc, but Apple will never leave what they have accomplished behind. I think they can do better honestly.

29. Laron unregistered

You have to realize, the average consumer or Apple fan doesn't care if the phone changes much. It's kind of like cars. Most cars keep the same body and shape for two to three, sometimes even four years, but the only thing they change are the tailights, headlight, grill, etc. Consumers want the newest, it's just the way it is and that is while some people might not like Apple or even despise them, their marketing strategy is second to none. I'm sure the Nexus Prime and Iphone 5 (if really released) will be great devices, but yes this is why it would be very easy for the Iphone 5 to obliterate the Nexus Prime in terms of sales.

31. Laron unregistered

I apologize for the errors in this, I didn't read it over.

33. Dj21o

Posts: 437; Member since: May 19, 2011

Yeah, maybe sales. Nobody can keep saving up money to buy a 600.00 phone every single month (Android). There are already awesome phones that Android has released already. The GSII has hit a record in Europe. People are obviously not going to look up specs and give a squirt of piss with the iPhone. They look at it and think it is the greatest thing on the earth. My opinion, it is not. But that is just me. Benchmarks have shown otherwise, SALES in the smartphone industry has shown that Google is wiping their floor with Apple. Maybe not on individual phones, but from a global perspective, they are kicking their ass.

39. Laron unregistered

This is true, in terms of worldwide sales. Google wants Android to reach all corners of the world, I believe I read that in an article. I prefer Android myself, but have no problem with Apple, if someone gave me one for my birthday or as a Christmas present I wouldn't ditch it for an Android, they're both great phones. I just like Google's vision, but I don't get attached, it's just a piece of technology lol.

73. Dj21o

Posts: 437; Member since: May 19, 2011

Lol it is hard not to get attached, especially when there is SO MUCH you can do on here. I don't use my laptop unless I absolutely have to. I download music, YouTube, pictures, facebook, tethering, I can't even put it all on here. I do wish Android implemented the IOS notifications. Like screen on for messages/email, and the pop down box that shows the message when you are in an app. That I like about IOS. I have my GSII rigged to turn on and hitting search opens my messages, but I wish it was like IOS 5. Other than that, IOS 5 is ehh.

32. Android4life unregistered

I don't understand why you would leave Sprint for expensive plans at Verizon. I dumped Verizon for Sprint, saving money and my service is stellar. Have fun getting ripped off.

40. Allday28

Posts: 318; Member since: Nov 19, 2010

Whens the last time sprint has upgraded there wimax footprint?!! Ill gladly pay the extra 10 dollars a month on verizon for such a better roll out of LTE anyday. Sprint is garbage!!

52. TOdoubleD

Posts: 114; Member since: Mar 28, 2011

Why would Sprint spend another dollar on Wimax expansion when they're switching to LTE at the beginning of 2012? What's funny about people like you is you think that just because a carrier doesn't work well for you, that it's garbage everywhere. It's the same dumb s**t on this site all the time. My carrier is better than yours and my phone is better than your phone. Good grief.

42. Chakra

Posts: 136; Member since: Dec 02, 2009

Congrats to you. Mabye sprint coverage isn't so stellar to him.

70. superguy

Posts: 347; Member since: Jul 15, 2011

Better coverage, speed, and reliability come as reasons. YMMV depending on where you live. But cost isn't the only consideration for a lot of people. You get what you pay for.

2. BrockSamson unregistered

I will laugh so hard if this is true :)

3. vette21man

Posts: 351; Member since: Apr 06, 2011

Wow, disappointingly this ties the rumors together. Being an AT&T customer, I would be pretty angry knowing that I still have 1yr left on my 2yr agreement, and I can only "early upgrade" to an iPhone 4S, while Sprint customers get a better update with the 5. Granted, Sprint customers have been "angry" this whole time being without the iPhone until now. What a change in tides this would be!

13. Kjayhawk

Posts: 294; Member since: Oct 07, 2010

if anything it might come to sprint first, like the galaxy s2, but a sprint exclusive i doubt that. I'm leaving sprint today actually and returning to verizon. I would doubt it will be a sprint exclusive but thats just me. It would be pretty funny if this was true.

4. AppleFanboy

Posts: 142; Member since: Jun 07, 2011

How about the fact that every other customer needs an Airave to get any type of connection?? Their coverage sucks and thats why theyre in the hole....the iPhone wont help much

8. Who Said No unregistered

Did coverage sucks??? It all despends on were your at. I have the iphone 4 with AT&T and my service sucks. When I had sprint I had no Drop calls, I had no problem picking up signal

64. Phonecall01 unregistered

you need to do some research...

5. TKFox007

Posts: 303; Member since: Nov 02, 2010

Why do I not believe that BGR report? Lets see, Sprint is dropping WiMax (which hasn't been expanded upon in a LONG time) for LTE. Why would Apple make their next iPhone exclusive on a network smaller than Verizon and AT&T? That's just utter foolishness.

14. Afterkick unregistered

20 billion dollars? Thats a lot of money my friend

25. TKFox007

Posts: 303; Member since: Nov 02, 2010

That's pocket change to Apple

Latest Stories

This copy is for your personal, non-commercial use only. You can order presentation-ready copies for distribution to your colleagues, clients or customers at https://www.parsintl.com/phonearena or use the Reprints & Permissions tool that appears at the bottom of each web page. Visit https://www.parsintl.com/ for samples and additional information.