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Sprint Sells 1.8 Million iPhones in 4Q 2011, 40% to New Subscribers

Sprint today became the last of the three major U.S. iPhone carriers to report earnings for the fourth quarter of 2011, disclosing that it sold a total of 1.8 million iPhones during the quarter. While well below the 7.6 million activations reported by AT&T and the 4.3 million activations reported by Verizon, Sprint's iPhone surge helped it achieve a new record high subscriber base of 55 million customers.

Notably, 40% of Sprint's iPhone purchasers were new to the carrier, highlighting the device's ability to attract customers from other carriers. That percentage is on par with AT&T's reporting during its early quarters of iPhone availability, although that number has tapered off for AT&T over time as those who wanted to switch made the move and new carriers such as Verizon and now Sprint have leveled the playing field somewhat.

While Sprint was undoubtedly pleased with the impact of the iPhone on subscriber numbers, it did have a short-term impact on Sprint's earnings with margins being eroded by the upfront subsidies the carrier paid to Apple for the devices. Sprint's total subsidy payments increased roughly 40% year-over-year and sequentially, hitting $1.7 billion.

Between the iPhone launch and Sprint's "Network Vision" initiative to consolidate and simplify its network technology as it moves to 4G LTE, the carrier's operating income margin was sliced nearly in half, leading to a net loss of $1.3 billion for the carrier. That performance did, however, beat Wall Street expectations by a small amount, and the carrier views the short-term hit to profitability in attracting iPhone customers to be an investment in the carrier's future. Sprint's strategy in negotiating to land the iPhone did indeed involve an effort to "bet the company" on the iconic device as Sprint struggled to keep up with AT&T and Verizon.

Related roundup: iPhone 6

Top Rated Comments

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35 months ago
I wonder if even Jobs realized exactly what he had on his hands in 2007. This phenomenon is set to be even bigger than the iPod. And all Apple really wanted was a little bit of share.
Rating: 6 Votes
35 months ago
I would think that the 40% jump in new subscribers would have been those flocking to Sprint as the last 'true' unlimited data network in the US. That's what it was for a few co-workers of mine. They all jumped ship from AT&T and Verizon for that data 'freedom'.
Rating: 5 Votes
35 months ago

Good for Apple, bad for Sprint. Now they are running even bigger losses with the iPhone.


They will also make up for it. I pay like $80 a month :P
Rating: 4 Votes
35 months ago
The iPhone gets a carrier a crapload of new customers?? Never saw that coming.
Rating: 4 Votes
35 months ago

I wonder if even Jobs realized exactly what he had on his hands in 2007. This phenomenon is set to be even bigger than the iPod. And all Apple really wanted was a little bit of share.


Not so fast. Ballmer and MS are "Coming Full Guns (http://www.informationweek.com/blog/229200895)"

"This year is undoubtedly the year of Windows Phone 7 as far as Microsoft is concerned."

Can't wait to see Windows Phone 8. :rolleyes:

Note: Actually I can wait.


Good for Apple, bad for Sprint. Now they are running even bigger losses with the iPhone.



Sprint would lose even more money if they did not have the iPhone. Why else would the CEO pay $20B to get iPhone (http://online.wsj.com/article/SB10001424052970203405504576603053795839250.html)?

The iPhone is that good. Android can't even come close to that - they can't even give them away. LOL
Rating: 4 Votes
35 months ago
Good for Sprint! Hopefully things get better!
Rating: 3 Votes
35 months ago
Sprint is going to do a debt offering of about $1.2B to cover the payments to Apple and network expansion. It is hard to find the liquidity in this market. So why not have Apple lend it with the network as the collateral. Sprint gets needed liquidity at market rates, Apple gets an income producing investment at higher than market rates. It has a strong position in case of default. Sort of a put.

If Apple were to be the banker to all its major customers such as Verizon and AT&T, it would be a very good self-feeding side business and an excellent use for a seemingly small portion of its cash hoard.

Rocketman
Rating: 3 Votes
35 months ago

Not so fast. Ballmer and MS are "Coming Full Guns (http://www.informationweek.com/blog/229200895)"

"This year is undoubtedly the year of Windows Phone 7 as far as Microsoft is concerned."

Can't wait to see Windows Phone 8. :rolleyes:


Can't wait to see you post something that isn't a variation on this in every thread.
Rating: 3 Votes
35 months ago

Too bad the performance on Sprint network sucks :mad: (both internet and phone reception) or I would switch.


Unless you actually used it yourself recently, you can't make that call. I personally used AT&T for 2.5 years and they were awful, VERY HAPPY with Sprint.

people, you have 14 days before you get locked in your phone, shop around, USE THEM and make your call, there is no reason for us all to be on the same carrier
Rating: 2 Votes
35 months ago

Unless you actually used it yourself recently, you can't make that call. I personally used AT&T for 2.5 years and they were awful, VERY HAPPY with Sprint.

people, you have 14 days before you get locked in your phone, shop around, USE THEM and make your call, there is no reason for us all to be on the same carrier



I am also with Sprint and have never had any issues with the quality of calls. My data speed does not compare with my family members who are on AT&T but it is not horrible. On the other hand, I pay $40 less per month than they do for similar plans with the exception that I have unlimited data and they are capped at 300MB. Some may prefer to pay more to get faster speeds, but I can handle the slower data speed for the difference in what I pay for my plan.
Rating: 2 Votes

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