When Sprint added the venerated iPhone to their mobile lineup, analysts were a bit nervous about what it was actually costing the company. After all, while a consumer pays $199 for their Siri-packing iPhone 4S (or $99 for just the iPhone 4), Sprint is actually subsidizing those costs. The goal is to get people locked in as customers, and that’s worth the expense. Or so the theory goes.
Sprint’s fourth quarter earnings statement release reveals how high that cost was with a loss of 1.3 billion dollars. That’s quite the jump from $30 million last year. Actually, it’s more like a rocket launch. Why are those numbers so high? Because Sprint added a whopping 1.8 million iPhone users, with a good 40 percent being new subscribers. That’s a huge gain for a company that normally issues earnings statements with bleeding subscriber stats.
Is Sprint’s costly investment going to pay off and will the monthly revenues from these new iPhones offset the initial cost? I think people should pay close attention to Sprint’s next two quarters. If they can sustain the new sign ups, the iPhone may have just saved their bacon.
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