Sprint Commits to Buying $20 Billion Worth of iPhones

The Wall Street Journal reported that Sprint is preparing to purchase 30.5 million units of the iPhone over the next four years, not taking into account whether they will be in demand at that time or not. If we consider the current selling price of the iPhone is $655, then this agreement will cost nearly $20 billion. Talk about commitment.

Mr. Hesse told the board that the carrier has to agree to purchase at least 30.5 million units of the iPhone whether or not they are still being purchased by the customer and that they must make the commitment of the $20 billion. We have heard that Sprint intends to subsidize the cost of each phone to the tune of about $500, this would take a long time to recover even with high monthly fees.

Sprint’s directors agreed to the deal as a gamble to give the company a chance to compete with AT&T and Verizon. Our sources tell us that no one is sure of the outcome of this staggering gamble. The reports note that this kind of commitments are not common between Apple and its partner carriers. Apple is happy to lock down carriers to the long run in the same way as it has looked into locking in component suppliers for its hardware.

BGR reported that due to this development they have heard that the iPhone 5 does exist and will be launched as a 4G WiMAX device as a Sprint exclusive. We have also received separate claims stating the Sprint will get the iPhone 5 (not the iPhone 4S) as an exclusive as an WiMAX device, and that AT&T and Verizon will be getting the iPhone 4S but then will get the iPhone 5 in the first quarter of next year LTE device. The iPhone 5 will be available internationally as a 4G HSPA+ device.

It is clear that Sprint is keep on making the future of its company the iPhone, although it may seem that it has gone to an extreme length to make this happen. We hope that it will be worth the gamble and that things will turn out great with the iPhone, also for the sake of the customers.

Finally, these are still all rumors and BGR has not always got their rumors right the first time round, but we post for the interest of our readers.


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