As everyone probably knows by now, the rumor-mill has strongly indicated that today’s Apple iPhone event will give us some form of Sprint iPhone. Yesterday, the Wall Street Journal reported that Sprint committed to $20 billion worth of iPhone purchases over four years. That’s a heck of a commitment, especially when you consider how past attempts at a “flagship” device have hurt Sprint. While the EVO worked out well, that was after Sprint had blown a small fortune promoting and pushing the Palm Pre. There were iPhone-esque lines out the door for the Pre on launch day in some areas, but there were also a massive amount of returns due to quality issues. It’s speculated that that’s why we never saw a Pre2 on Sprint. Then, there was the Kyocera Echo, the “hey neat” dual-screen phone that Sprint pushed as the new (non-4G) hotness. It’s basically a free phone now, with little to no mindshare. As for market share, it may be the only current smartphone I’ve never seen in the wild.
While the iPhone has the advantage of existing mindshare and market share, and coupling it with Sprint’s cheaper-than-everyone-else prices would have an advantage to many, the idea of sinking that much cash into the deal is sending investors running scared. As of this writing, Sprint stock is already down almost five percent and still falling. I know that seems like a crazy reaction to getting the most popular cellphone model on your network, but think of it as a reaction to Sprint taking yet another risk — however slight — when so many of them have not panned out.
However, Barrons reports that JP Morgan disputes WSJ’s numbers and that we should be buying, not selling. JP Morgan basically says that if the WSJ is right, the iPhone will cost more (for Sprint) than any other phone and make absolutely no business sense. Which is, given the track record here, what the investors are concerned about.
Techcitement will be commenting on the Apple iPhone event today via Twitter.
Yep, IMO, Barron’s is absolutely right on this one — and timid Sprint investors who run from this announcement are fools.
The *only* way I see this not working out well for Sprint is if it turns out they haven’t actually locked in an “exclusive” of any sort, and merely spent a load of money to stock up on Apple’s phones. (Having excessive inventory is never good for ANY company.)
I guess we’re about to find out — but if Sprint managed to lock in an iPhone 5 exclusive while all other carriers get a slightly revised/updated iPhone 4 instead? They just made one of the smartest business moves they could make. Look what the original iPhone did for AT&T’s cellular market-share!
It’s strange to me that Sprint would get an iPhone. Wimax is petering down. I read something about Sprint committing itself to a 4g LTE network or something because it know wimax is heading out in the US. That seems to me that an iPhone purchased though Sprint would not last long and need to be repurchased when the 4g LTE is up.
I have a Sprint contract, but – for budgetary reasons – I’m still using my Razr. The way things are going, if I get a tablet, do I really need a smartphone? I hate texting, especially on my phone, which I use to, you know, actually CALL people. But, if my finances turn around, and I do get a smartphone, I have to say I prefer the EVO to any of the iPhones.
The advantage to a non-iPhone on Sprint is you can probably find it free somewhere.