WSJ: Sprint Bets $20 Billion on New iPhone

October 3, 2011 -

The third largest wireless carrier in the United States is betting on the iPhone 5 in a big way. Sprint Nextel Corp. will pay Apple a whopping $20 billion dollars to give its customers access to iPhone 5, according to the Wall Street Journal. The company's top executive told Sprint's board that he expects to lose money on the deal until sometime in 2014.

He also reportedly said that the deal would require them to purchase at least 30.5 million iPhones over the next four years, according to a source familiar with the company. That's where that $20 billion dollar figure comes from.

According to the same insider source, board members seemed worried that the wait for the payoff in this deal was too long, and that the deal might outlast the iPhone's popularity.

"This is a bet-the-company kind of thing,'' a person familiar with Sprint's decision-making told the WSJ. He or she described the impact to the company's financials as "staggering." Whether the deal is bad or not, the Board of Directors ended up signing off on it and here we are.

Apple is expected to unveil its newest iPhone at its Cupertino, California event tomorrow. Sprint is expected to announce their plans to carry the device later in the week.

One advantage Sprint has over its competitors is that it still offers unlimited data plans. One would assume that such data plans would be available to new iPhone customers as well.

Source: WSJ

Image provided by ShutterStock. All rights reserved.


Comments

Re: WSJ: Sprint Bets $20 Billion on New iPhone

All they got was IPhone 4S and somehow they are supposed to sell it when the IPhone 5 could be right around the corner like the 3GS and how the Iphone 4 came out months later

 
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Montewell thanks for the info Eisen; try that the next time i need something off the eshop09/23/2014 - 3:54pm
james_fudgere: MP, i've sent tech support a note - thank you :)09/23/2014 - 3:14pm
IanCNah that wasnt directed at you Andrew :)09/23/2014 - 3:00pm
Papa MidnightRe: SIEGE 2014 Keynote: oh dear...09/23/2014 - 2:44pm
MaskedPixelanteDear GP, something called "doubleverify" is causing some nasty browser issues on my end. Probably one of your ads.09/23/2014 - 2:36pm
Andrew EisenOh hell no. No, it took Nintendo a dog's age just to get to the point its competitors have been at for a while! (And it's still not there yet, in a lot of respects.)09/23/2014 - 2:26pm
IanCSame as PSN handles it, fi you are trying to say only nintendo do that.09/23/2014 - 2:23pm
Andrew EisenYou have to try to purchase something first. Pick a game, hit purchase and if your wallet doesn't have enough to cover it, you'll be given an option to "add exact funds" or something like that.09/23/2014 - 2:05pm
MonteI have seen no option for that on my 3DS; anytime i want to add funds it only gives me the option to add in denominations of $10, 20, 50 or 10009/23/2014 - 2:03pm
IanCWhat Andrew Wilson said. PSN is the same when you make a purchase over a certain price (£5 in the UK)09/23/2014 - 2:02pm
Andrew EisenNeither eShop charges sales tax either. At least in California.09/23/2014 - 2:00pm
Andrew EisenBoth Wii U and 3DS eShops allow you to add funds in the exact amount of whatever's in your shopping cart. If your game is $39.99, you can add exactly $39.99.09/23/2014 - 1:57pm
Infophile@Matthew Wilson: As I understand it, any regulations to force tax online would also set up an easy database for these stores to use, minimizing overhead.09/23/2014 - 1:30pm
MonteReally, the eshop just does next to nothing to make buying digitally advantagous for the customer. Its nice to have the game on my 3DS, but i can get more for less buying a physical copy at retail. And that's not even counting buying used09/23/2014 - 1:18pm
MonteIanC, The Eshop wallet system only lets you add funds in set denominations and the tax makes sure you no longer have round numbers so you ALWAYS loose money. A $39.99 game for instance requires you to add $50 instead of just $4009/23/2014 - 1:13pm
Matthew Wilsonbut thats just it those sites, even the small ones, sell all over the country.09/23/2014 - 11:12am
Neenekoeither that or it would follow the car model of today. big ticket items are taxed according to your residence, not where you buy them.09/23/2014 - 11:07am
NeenekoI doubt it would be the retailer that handles the tax in the first place. If it goes through it would probably be folded in as a service on the processor end or via 'turbotax' style applications.09/23/2014 - 11:05am
Matthew Wilsonsimple there are over 10k tax areas in the us for sales tax. it would be impossible for small online retailers to handle that.09/23/2014 - 10:55am
IanCWhats wrong with charging tax in an online shop?09/23/2014 - 10:47am
 

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