Photo: Illustration: Ellis Hamburger
To get the iPhone, Sprint agreed to rather onerous terms with Apple, Joann Lublin and Spencer Ante at the Wall Street Journal report.Sprint agreed to buy 30.5 million iPhones over the next four years, regardless of whether or not it can sell the phones. At current rates, the WSJ says Sprint would be paying $20 billion for the handsets. (It’s possible Apple introduces a cheaper phone in the next few years, thus lowering that number.)
A source familiar with the company to Lublin and Ante called it a “bet-the-company kind of thing.” Without the iPhone, Sprint was getting whipped by Verizon and AT&T. With the iPhone it thinks it has a chance. But, to get the iPhone’s price down to a competitive figure, will be subsidizing the iPhone by $500 per device sold.
Should be interesting to see how this one plays out.