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Bryan M. Wolfe
| February 28, 2012
Sprint To Purchase 24 Million iPhones
Sprint, the third largest wireless network in the US, has announced that it has committed to buying a minimum of 24 million iPhones over the next few years. This news arrived via Sprint’s most recent 10-K filing with the SEC and first reported by Barrons. In total, Sprint will purchase $15.5 billion in iPhones, although that number will almost certainly be surpassed. In October, the company stated that it would need to purchase 30.5 million iPhones over the next four years just to remain competitive. Because Sprint pays a higher subsidy on the iPhone than for other mobile handsets, the company expects lower profits in 2012. According to the filing:
“(The minimum iPhone purchase) will result in an expected increase in cash outflow and reduction in operating income in the earlier years of the contract until such time as we may recover the acquisition costs through subscriber revenue.With the arrival of the iPhone 4S last year, Sprint became just the fourth US carrier for Apple’s popular handset, behind AT&T, Verizon and C Spire. Sprint customers, we’d like to know: Are you happy with your iPhone 4S purchase? Was it worth the wait?