Sprint today announced financial results for the third quarter of 2011, and while the carrier did not begin offering the iPhone until after the quarter ended, it was still able to beat analyst estimates and report a smaller-than-expected loss. Perhaps most significantly, Sprint reported a net gain of 1.3 million subscribers during the third quarter, the carrier's best performance in over five years.

sprint logo
Sprint also took the opportunity to tout the iPhone in its press release, citing the device's record-breaking launch and the expectation that iPhone customers will be among the carrier's most profitable.

Growth in Sprint brand net additions was achieved without the benefit of Apple’s iPhone 4S and iPhone 4, which launched Oct. 14. The launch of this iconic device resulted in Sprint’s best ever day of sales in retail, web and telesales for a device family in Sprint history. The response to this device by current and new customers has surpassed initial expectations. The iPhone is expected to be accretive for Sprint, and iPhone users are expected to be among Sprint’s most profitable customers.

Overall, Sprint reported a loss of $301 million for the third quarter, down from a $911 million loss in the year-ago quarter. The carrier is said to have committed to purchase over 30 million iPhones over the next four years, with the upfront costs potentially resulting in Sprint taking an initial hit to its financial numbers. But with Sprint expecting strong profits from iPhone service contracts, the carrier anticipates that the iPhone will be a strong contributor to improved financial performance over time as it recoups its initial outlay.

Update: Sprint CEO Dan Hesse reported to Reuters that Sprint will need $7 billion in new financing over the next few years in order to support the iPhone commitment and the network transition to LTE.

Sprint said that while the iPhone would cost the company $15 billion in the next four years, it would generate $7 billion to $8 billion in projected future value for Sprint over that period.

Sprint said it will pay Apple an iPhone subsidy that is 40 percent higher, or $200 more per device, than the subsidies it pays for other phones.

But the company's executives said it should be worth the extra cost as the device is bringing in new customers.

"IPhone has an expensive contract but is worth every penny," Hesse said.

Top Rated Comments

justinfreid Avatar
124 months ago
Dollars in, dollars out

Apple's iPhone business model makes it so it's nearly minting money in Cupertino. Seeing the short term financial impact on Sprint of selling the iPhone, comprised of around $550 payments right to Apple for every contract a customer signs, indicates the strong pent up demand for the iPhone on different carriers and that the carriers are still willing to pay that upfront premium to sign up new data users. Apple gets cash stuffed into both pockets.
Kudos to Peter Oppenheimer, Apple's CFO.
Score: 3 Votes (Like | Disagree)
mkrishnan Avatar
124 months ago
How does that work? So they're going to lose 7-8 billion dollars from the iPhone? Sounds like a great way to run a business! Or do they mean it will generate 7-8 billion MORE than the 15 it cost?
C|Net offers more detailed analysis here:

http://news.cnet.com/8301-1035_3-20125836-94/sprint-finally-opens-up-on-iphone-4g-plans/

If this inline works...



They are projecting that they will lose money on the iPhone through 2014 and then start making money on it in 2015. Basically, because iPhone users have traditionally been lower turnover and higher revenue (albeit with fewer carrier options in the past), they "should" be able to make money on them in the long term.
Score: 2 Votes (Like | Disagree)
Shrink Avatar
124 months ago
I'm sure their sales with be a to of higher. I know many people that got the Sprint iPhone.


Now there's a solid scientific method for making sales projections. :eek: ;) :rolleyes:
Score: 2 Votes (Like | Disagree)
briankwest77 Avatar
124 months ago
Enjoy your 0.15 Mb/s Up/downs

I'm getting 1.25+ and .60 up most of the time.. I sure enjoy it... thanks.

/b
Score: 1 Votes (Like | Disagree)
nagromme Avatar
124 months ago
Sprint’s numbers sound wrong

Sprint said it will pay Apple an iPhone subsidy that is 40 percent higher, or $200 more per device, than the subsidies it pays for other phones.
Napkin math:

If $200 is 40% more than other phones, that would mean those other phones (many not even smartphones?) get a $500 subsidy each, and the iPhone gets $700. Those numbers sound way too high to me:

* iPhone unlocked prices (4 and 4S) range from $549 to $849.

* iPhone subsidized prices range from $99 to $399.

* So if Apple charges the carriers the full retail unlocked price, minus what the consumer pays up front, then the carrier’s cost would be $450 per iPhone, across the range.

* But in fact, with a mass commitment like this, Sprint probably doesn’t pay full retail price. (Maybe it varies per model.) It’s got to average somewhere less than $450 per iPhone, right?

Yet Sprint says they pay $500 for non-iPhones (including non-smartphones?) on average, and $700 per iPhone?

For that matter, do those other phone makers have a full $200 of extra margin they can give up to the carrier, vs. what Apple gives? Or do their phones cost $200 less to make? (Maybe so, if many aren't smartphones?) All the numbers sound too high to me.

What am I missing? Sprint’s statement does say “pay Apple,” so they’re not factoring in infrastructure, advertising, or other costs when they’re talking about 40% = $200 more.

Just curious.
Score: 1 Votes (Like | Disagree)
blue22 Avatar
124 months ago
Sprint thus far has been great...

Sprint's 3G network is a slightly slower than AT&T's for sure, but it's not that big of a deal in the grand scheme of things.

Overall the network is more consistent and offers better value (unlimited data plan, and free night & weekends starting at 7pm) for similarly priced plans so I'm certain this is going to help Sprint make money/profit off the iPhone in the long run despite their initial upfront commitment. And so far, I've been completely satisfied with their service & network on my iPhone 4S (and I use the web a lot too on the phone) so zero complaints here. :)
Score: 1 Votes (Like | Disagree)

Top Stories

april 2021 event coverage feature

Apple Event Live Coverage: New iPads, AirTags, and More Expected [Event Over]

Tuesday April 20, 2021 9:07 am PDT by
Apple's virtual "Spring Loaded" event kicks off today at 10:00 a.m. Pacific Time, with Apple expected to debut updated iPad models and perhaps some other hardware such as AirTags or iMac models based on Apple silicon. Apple is providing a live video stream on its website, on YouTube, and in the company's TV app across its platforms. We will also be updating this article with live blog...
m1 imac colors

Apple Announces Redesigned iMac With M1 Chip and Seven Color Options

Tuesday April 20, 2021 10:22 am PDT by
Apple has announced a new, redesigned 24-inch iMac, featuring an M1 chip, a 4.5K display, and a range of color options, as well as an improved cooling system, front-facing camera, speaker system, microphones, power connector, and peripherals. The new iMac features a completely new compact design, and comes in a range of seven striking colors, including green, yellow, orange, pink, purple,...
duan rui iphone 12 13 notch

New Images Show Smaller iPhone 13 Notch Compared to iPhone 12

Saturday April 17, 2021 11:38 pm PDT by
Leaker known as "DuanRui" has shared more images that could give us our best look yet at Apple's redesigned notch for the iPhone 13. The new pictures follow similar images shared by the leaker last week, but the latest shots include a comparison with the existing iPhone 12 notch. DuanRui posted three images on Twitter that apparently originate from Weibo, although source details remain...
Top Stories 57 Feature

Top Stories: Apple Event Next Tuesday, Mini-LED iPad Pro, iPhone Rumors

Saturday April 17, 2021 6:00 am PDT by
It feels like we've been waiting forever for new Apple products, but the wait is almost over as Apple has announced a media event for next Tuesday, so make sure to tune into MacRumors for full coverage of everything Apple announces. While that was the big news this week, we also got some new details on Apple's iPhone plans for 2022 and 2023 courtesy of analyst Ming-Chi Kuo, and we also saw...
iphone 12 preorder purple

Apple Launching iPhone 12 and 12 Mini in New Purple Color on April 30

Tuesday April 20, 2021 10:08 am PDT by
Apple today announced that the iPhone 12 and iPhone 12 mini will be available in a new purple color starting April 30, with pre-orders starting this Friday. Apple is also releasing a new MagSafe Leather Case and Leather Sleeve in Deep Violet, a Silicone Case in Capri Blue, Pistachio, Cantaloupe, or Amethyst, and a Leather Wallet in Arizona, all available to order beginning today. iPhone...
f1618938547

Apple Announces AirTag Tracking Devices Starting At $29 Each

Tuesday April 20, 2021 10:10 am PDT by
Apple today announced AirTag, a Tile-like Bluetooth tracking device that's designed to be attached to items like keys and wallets for tracking purposes, letting you find them right in the Find My app. AirTags are accessories for attaching to backpacks, luggage, and other items. Any U1 device like the iPhone 12 can be used for precision finding to guide you right to the item you're looking...
iPad Pro

New 12.9-Inch iPad Pro Will Be 0.5mm Thicker to Accommodate Mini-LED Display

Monday April 19, 2021 11:30 am PDT by
The upcoming 12.9-inch iPad Pro will be thicker than the previous-generation version, likely due to the inclusion of the mini-LED display. We've heard several rumors about the change in thickness, and now leaked design images have confirmed it. A source that designs accessories for Apple devices sent MacRumors a series of photos that feature exact dimensions for the new iPad Pro models, and...
ipad pro with m1 chip

Apple Introduces Next-Generation iPad Pro With M1 Chip, Thunderbolt, 5G, XDR Display, and More

Tuesday April 20, 2021 10:40 am PDT by
Apple today announced the next-generation iPad Pro with the same M1 chip found in the latest Macs, Thunderbolt and USB4 support, 5G connectivity on cellular models with mmWave support in the United States, and more. With an 8-core CPU and 8-core GPU, Apple says the M1 chip in the new iPad Pro provides up to 50% faster performance and up to 40% faster graphics compared to the A12Z Bionic chip ...
iPad Pro Feature Orange

Wedbush Analysts Say 'Spring Loaded' Event Will Debut New iPads With 'Modest Price Increase,' Along With 'a Few Surprises'

Monday April 19, 2021 6:37 am PDT by
Apple is planning to launch a new entry-level iPad, iPad mini, and iPad Pro at its "Spring Loaded" event tomorrow, along with "a few surprises," according to Wedbush analysts. In a new note to investors, seen by MacRumors, Wedbush analysts Daniel Ives and Strecker Backe explained that the iPad will be the main focus of Apple's "Spring Loaded" event, with new entry-level iPad, iPad mini, and ...
flat imac 3d 3 teal

Reliable Leaker Hints Redesigned Colorful iMac to Debut at 'Spring Loaded' Event

Saturday April 17, 2021 4:43 am PDT by
Reliable leaker known as l0vetodream has hinted that Apple may debut its rumored redesigned and colorful iMac at its "Spring Loaded" event on Tuesday, April 20. In a tweet, the leaker posted an image of Apple's logo used for marketing the upcoming event and an image of the retro rainbow Apple logo alongside the colorful lineup of G3 iMacs. Apple leaker Jon Prosser previously reported that...