Sprint Signs $20 Billion iPhone Deal; iPhone 5 Sprint Exclusive?

I generally try to steer clear from the silly and crazy rumour mill surrounding soon-to-be-expected-to-be-launched devices, but this one is kind of interesting. The Wall Street Journal is reporting that the US carrier Sprint is pretty much betting the company on Apple’s next iPhone, ordering a staggering 30.5 million of them. At the same time, BGR reports that the iPhone 5 will be exclusive to Sprint (in the US at least), as a WiMAX device.

The report by The Wall Street Journal is probably accurate, as Apple and the WSJ are more or less close friends, and Apple would want to brag about a deal like this. On top of that, the WSJ almost always has an Apple “rumour” up and running the day before an Apple event.

The gist is this: Sprint has ordered at least 30.5 million iPhones (the new one, unveiled tomorrow), which would cost Sprint about $20 billion. This is a massive gamble, since the company is struggling to make ends meet as it is, so this really has to work for them or else the company might very well be in big, big trouble in a few years.

Just how big the gamble is becomes evident when you crunch the numbers. To sell all of these iPhones, Sprint has to double its customer base – or convert all of its existing customers to iPhones (they’re obviously aiming for somewhere in the middle). That’s pretty intense. The WSJ reports that some of Sprint’s board members were apprehensive about the deal, questioning whether the iPhone would still be popular in a few years’ time.

Now, from all this, one question became obvious at least to me: the only way this can work for Sprint is if they will be the exclusive US carrier for the new iPhone. If both AT&T and Verizon get the exact same iPhone from day one, Sprint will have very little to lure customers away with from the other two carriers.

This is where the less trustworthy rumour from BGR comes into play. BGR’s Jonathan Geller had been going back and forth for weeks with what he calls an extremely reliable and solid source about a very hard-to-digest rumour – namely, that Sprint will be the exclusive US carrier for the iPhone 5.

“I have been told that Sprint will be getting the iPhone 5 – yes the real iPhone 5, not the iPhone 4S – as an exclusive,” Geller writes, “And it will be a 4G WiMAX device. AT&T and Verizon would launch the iPhone 4S and get the iPhone 5 some time in the first quarter of next year as an LTE device. Globally, the iPhone 5 might be available as a 4G HSPA+ device.”

Geller didn’t know what to do with the rumour at first, but combined with the $20 billion deal The Wall Street Journal is reporting, it might actually make sense. We’re looking at 30.5 million guaranteed iPhone channel sales (not real sales, since Sprint might as well not sell them all) – which is great for Apple. Even if Sprint can’t sell all of them, Apple still gets the money.

So, in what way does the iPhone 5 differ from the iPhone 4S which is pretty much a sure shot? It will have a faster CPU, larger screen (4″), 1GB of RAM, larger but thinner design, 32GB, iPhone 5 exclusive software and APIs (Assistant), and a dedicated Assistant button.

If all this is true, it’s pretty big news – at the same time, as I understand it, Sprint’s coverage isn’t exactly very good, so I’m wondering just how many people will choose crappy coverage just to get the iPhone 5. I mean, the Verizon iPhone was supposed to be a big deal, but it barely registered on the radar in the grand scheme of things.

We’ll know for sure tomorrow.

56 Comments

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