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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 roundups: iPhone 5c, iPhone 5s, iPhone 6

Top Rated Comments

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32 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: 17 Votes
32 months ago

And all Apple really wanted was a little bit of share.


You keep saying this in thread after thread and I find it false. Do you really believe Apple didn't want a large share of the market? Just because Steve/Apple made a comment or provided a soundbite back SEVERAL years ago about what they wanted doesn't make it fact. Nor does it make it relevant now. I am pretty sure that Apple wants to dominate in all the markets they participate in. That's business. Saying you'll be happy with X is a PR/Marketing bite which allows you (as a company) to look ok with just a minimal share since that's "all you're going for" and also look AMAZING by exceeding those expectations.

It's word play. It's PR. Smart PR... but PR.

But don't believe for a second that they wanted or would have just been happy with a small share.
Rating: 12 Votes
32 months ago
The iPhone gets a carrier a crapload of new customers?? Never saw that coming.
Rating: 10 Votes
32 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: 9 Votes
32 months ago
Good for Sprint! Hopefully things get better!
Rating: 7 Votes
32 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: 6 Votes
32 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: 5 Votes
32 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: 5 Votes
32 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: 5 Votes
32 months ago
Hmmm. I thought all of this was supposed to have bankrupted AT&T by now... lol
Rating: 3 Votes

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