Sprint Commits to Buying $20 Billion Worth of iPhones, To Get Redesigned iPhone 5 Exclusively?

sprint logo

The Wall Street Journal reports the Sprint is preparing to "bet the company" on the iPhone, agreeing to purchase 30.5 million units over the next four years regardless of whether they are purchased by customers or not. At a current average selling price of $655 for the iPhone, the agreement is a nearly $20 billion commitment for Sprint.

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. In order to keep the price people pay for the phone low and competitive with rivals, Sprint would be subsidizing the cost of each phone to the tune of about $500, which would take a long time to recoup even at the high monthly fees iPhone users pay.

With a source calling the projected hit to Sprint's operating income "staggering", the company's directors agreed to the deal as an all-in gamble to give Sprint hopes of competing against AT&T and Verizon.

The report notes that such commitments aren't unusual for Apple's carrier partners, demonstrating the leverage Apple has gained with the iPhone. With multi-year deals carrying unusual provisions for increasing units over time, Apple is locking in carriers for the long haul in much the same way that it has sought to lock in component suppliers for its hardware.

iphone5
In the wake of the new report on Sprint's massive iPhone commitment, BGR separately reports that this development may lend weight to a claim it had heard that had previously seemed outrageous – that the iPhone 5 does indeed exist and that it will launch as a 4G WiMAX device as a Sprint exclusive.

I have been told that Sprint will be getting the iPhone 5 — yes the real iPhone 5, not the iPhone 4S — as an exclusive. And it will be a WiMAX device. AT&T and Verizon would launch the iPhone 4S and get the iPhone 5 sometime in the first quarter of next year as an LTE device. Globally, the iPhone 5 might be available as a 4G HSPA+ device.

The claim reportedly comes from an "incredibly solid" industry contact and is one which has seemed simply unbelievable. But with Sprint clearly betting the future of the company on the iPhone, it is at least possible that it may have gone to extreme lengths to make a staggering entrance to the iPhone market.

BGR's rumor record has been spotty over time, and it's hard to imagine Apple making this move. Still, we mention it for interest and discussion in the lead-up to tomorrow's media event.

Top Rated Comments

chrmjenkins Avatar
133 months ago
If this is all true and it actually works for Sprint, Hesse is going to need a wheelbarrow to cart his massive balls around in.
Score: 64 Votes (Like | Disagree)
djrod Avatar
133 months ago
So Sprint sells the IPhone 5 and AT&T sells the cases ? :confused:
Score: 48 Votes (Like | Disagree)
arn Avatar
133 months ago
I'm really torn right now... on one hand, it's the WSJ. They speak volumes and don't usually open their mouths unless they're very sure of their sources.

On the other hand, I can't believe Apple would do this. There isn't a single iPhone 4 user out there that has completed their 2-year contract with AT&T or Verizon. They'd be pissing in the faces of every single iPhone 4 user by not allowing them to upgrade without a ton of hassle.

As much as I trust the WSJ, I'm calling BS. This just doesn't add up, and I don't think Apple would screw this many customers for a few extra bucks. IMO, they'd lose more in iPhone 5 sales than what they'd make from Sprint!
Note there are 2 rumors here.

1. WSJ: Sprint committing $20 billion to Apple
2. BGR: Sprint as an iPhone 5 exclusive

They are separate sources, and honestly, of separate believability. But tied together in reasoning. Sprint is supposedly paying this $20 billion to get exclusivity.

arn
Score: 44 Votes (Like | Disagree)
MacDawg Avatar
133 months ago
I can see Sprint being cut in, but not exclusively
Score: 34 Votes (Like | Disagree)
whawhat Avatar
133 months ago
With Apple expanding the number of carriers that carry the iPhone worldwide, why would Apple take a step backward and make there #1 money making product available only on Sprint? It makes no sense.

Sprint carrying the iPhone starting Oct. 4th makes more sense.
Score: 32 Votes (Like | Disagree)
oiuh151 Avatar
133 months ago
Lol, BGR. When was the last time they got a rumor correct?
Score: 25 Votes (Like | Disagree)

Popular Stories

airtag in hand

Apple AirTag Linked to Increasing Number of Car Thefts, Canadian Police Report

Friday December 3, 2021 7:10 am PST by
Apple's AirTags are being used in an increasing number of targeted car thefts in Canada, according to local police. Outlined in a news release from York Regional Police, investigators have identified a new method being used by thieves to track down and steal high-end vehicles that takes advantage of the AirTag's location tracking capabilities. While the method of stealing the cars is largely ...
telsa cyberwhistle

Elon Musk Urges Customers to Buy 'Tesla Cyberwhistle' Instead of Apple Polishing Cloth

Wednesday December 1, 2021 4:01 am PST by
Tesla CEO Elon Musk has encouraged customers to buy the "Cyberwhistle" for $50 instead of Apple's much-discussed Polishing Cloth. The product page, which Musk shared on Twitter on Tuesday evening, offers a limited edition stainless steel whistle with the same distinctive design of the Tesla Cybertruck:Inspired by Cybertruck, the limited-edition Cyberwhistle is a premium collectible made from ...
maxresdefault

Five Features to Look Forward to in the 2022 MacBook Air

Tuesday November 30, 2021 1:51 pm PST by
In 2022, Apple is going to release an updated version of the MacBook Air with some of the biggest design changes that we've seen since 2010, when Apple introduced the 11 and 13-inch size options. In the video below, we highlight five features that you need to know about the new machine. Subscribe to the MacRumors YouTube channel for more videos. No More Wedge Design - Current MacBook...
apple top apps games 2020

Apple Reveals the Most Downloaded iOS Apps and Games of 2021

Thursday December 2, 2021 12:05 am PST by
Along with naming its editorial picks for the top apps and games of 2021, Apple today shared charts for the most downloaded free and paid apps and games in the United States across 2021. The number one most downloaded free iPhone app was TikTok, followed by YouTube, Instagram, Snapchat, and Facebook. The top paid iPhone apps included Procreate Pocket, HotSchedules, The Wonder Weeks, and Touch...
iPhone SE Cosmopolitan Clean

New iPhone SE Reportedly on Track for Release in First Quarter of 2022

Tuesday November 30, 2021 8:08 am PST by
Apple plans to release a third-generation iPhone SE in the first quarter of 2022, according to Taiwanese research firm TrendForce. If this timeframe proves to be accurate, we can expect the device to be released by the end of March. As previously rumored, TrendForce said the new iPhone SE will remain a mid-range smartphone with added support for 5G:In terms of product development, Apple is...
m3 feature black

Macs With 'M3' Chips Expected to Use TSMC's 3nm Chip Technology With Test Production Reportedly Underway

Thursday December 2, 2021 7:36 am PST by
Apple's chipmaking partner TSMC has kicked off pilot production of chips built on its 3nm process, known as N3, according to Taiwanese supply chain publication DigiTimes. The report, citing unnamed industry sources, claims that TSMC will move the process to volume production by the fourth quarter of 2022 and start shipping 3nm chips to customers like Apple and Intel in the first quarter of...
apple view concept right corner

Apple Planning to Replace the iPhone With AR Headset in 10 Years

Wednesday December 1, 2021 2:29 am PST by
Apple is planning to replace the iPhone with an augmented reality (AR) headset in 10 years, a process that is apparently due to start as soon as next year with the launch of a head-mounted device, according to a recent report. Concept render of Apple's rumored AR headset by Antonio De Rosa In a note to investors seen by MacRumors, eminent analyst Ming-Chi Kuo explained that "Apple's goal is...