Now that Apple officially announced the next iPhone revision, we can finally put an end to months of rumors and guesses about the handset itself. Judging by the lack of discussion in the press, most people apparently feel there’s nothing more to say about the addition of Sprint as a carrier offering the iPhone, too? I’m not so sure. I was struck by how little was said about Sprint on Engadget’s liveblog of the Apple event. The event started at noon, and it wasn’t until around 1:35PM that a single mention was made of the iPhone 4s’s availability from AT&T, Verizon or Sprint, and that mention amounted to a footnote near the end. In fact, checking Apple’s website today, it’s interesting to note that it offers the ability for an AT&T or a Verizon customer to check their eligibility for a 4s upgrade, but only tells Sprint users the capability is “coming soon.”
According to the Wall Street Journal, Sprint agreed to invest $20 billion over the next four years, buying 30.5 million iPhones from Apple. That math could work out in Sprint’s favor, but they’d have to sell a little under eight million phones per year to do it and their latest financials indicate roughly twelve million of their subscribers elect to upgrade phones each year. It doesn’t seem too unlikely Sprint could convince at least one-third of existing subscribers to go with a new iPhone as an upgrade, leaving them with the task of signing up four million new customers per year on iPhone plans to make this strategy pay off. Still, this amounts to gambling with a lot of money, while Sprint isn’t exactly flush with cash to begin with.
The impression I get is that Sprint isn’t so concerned about entering the iPhone market with a big splash. Rather, this is part of a calculated long-term strategy for them. The iPhone 4s Sprint receives doesn’t have any unique hardware in it giving it the ability to run on their 4G WiMAX network. In the short term, an iPhone 4s on AT&T’s network moves data far more quickly than on the other carriers’ networks. In the near future, the iPhone 4s benefits Sprint primarily because it gives them a perceived “state of the art” smartphone, usable with true unlimited data plans, that doesn’t utilize the WiMAX standard they’d like to eventually phase out! By the time we see an iPhone 5 from Apple, it will almost certainly support the new LTE 4G standard, which is part of all major carriers’ transition plans. Imagine the frustration if Sprint customers lock in two-year contracts with newly announced 4G WiMAX compatible Android phones, only to be told in a year that they’re going to lose their 4G service? It’s far better to sell customers a new phone they want that lacks a feature than to disable a phone’s feature after the purchase is made.
Sprint hasn’t shared figures on how many iPhone 4s handsets they’ve actually ordered. It’s quite possible their agreement with Apple includes plans to purchase a gradually increasing number of iPhones as the next four years progress, meaning a relatively small number of 4s handsets today and a bigger commitment to the iPhone 5 down the road.
As a Sprint customer myself (currently using an HTC Evo 4G), I’m not even eligible for a phone upgrade until next March. That gives me a little more time to see how things develop, but if I was able to upgrade today? I probably would do so, simply because I’ve found the WiMAX 4G signal to be spotty where I live. I only see the 4G icon light up randomly when I’m out and about. It’s simply not a big factor in my cellphone usage. Meanwhile, my EVO 4G phone continues to devalue with each passing day. Already, I doubt I could resell it for enough money to cover more than my bill for a month’s service. By contrast, my experience with previous iPhones indicates they’re usually in demand for several years after their initial purchase. I was able to resell my original iPhone (first generation) for more than it cost me to upgrade to a new iPhone 3G, after it was two years old. Not long ago, I was able to fetch over $150 for a used iPhone 3G with a broken screen. I think I’d find the new personal assistant voice recognition features of the 4s very useful, and I’d welcome the improved camera and battery life as well.
All in all though, this is Apple’s update year for their smartphone. Next year is the major revision part of their cycle. Sprint is simply getting a headstart on offering Apple’s products before the iPhone 5 comes along. When that happens, carriers can no longer use limitations of the competitions’ incompatible data networks as selling points. They’ll all handle simultaneously voice and data identically, and they’ll all use a common standard to move around 4G data. Sprint may find it easier to convert existing iPhone 4s customers into iPhone 5 customers than to earn new ones when the battle focuses more intently on topics like coverage area.
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