Sprint buys 30.5M iPhones from Apple for $20B in 'bet-the-company' move - Page 3

Explain to me how denying the player with just 12% of market share, but allowing the rest of the players to have the device... is in any way a form of 'exclusivity'?

The whole story is just bogus - it completely defies logic and sounds more like an attempt to manipulate stock prices than anything else.

What? How is this good for Apple? Why give Sprint exclusive rights? To guarantee 30 mill IP5 sales over 4YEARS? They will sell that many anyway. Why piss off your current business partners? The only one that this deal benefits is Sprint. Apple will meet those IP5 numbers sooner with 3 carriers vs one exclusivlely for 6 months. The numbers just don't add up....... it is win win for Sprint but thats about all...there has to be more to it than just numbers if this is true.

This doesn't make sense. Apple sold twenty million iPhones last quarter.

Giving one carrier exclusivity for four years to sell thirty million handsets doesn't add up. The math doesn't work; they would be leaving dollars on the table.

As a matter of fact, it's a ludicrously bad deal. That's a paltry 1.9 million iPhones and $1.25 billion revenue per quarter.

If Apple cut a deal like this, their shareholders would revolt. Half a dozen fund managers would look at plummeting revenue estimates and call up the board and tell them they are fired.

It makes zero sense. It would immediately alienate millions of Apple consumers, and it would also alienate both Verizon and AT&T, plus it would artificially limit the sales of the device for six months. Apple is not desperate - they don't need to make the carrier tied for dead last in the market share war happy by guaranteeing them exclusivity in exchange for some arbitrary order volume.

If anything, your logic (and that driving this whole rumor) has the story backwards; it is based on the idea that Apple somehow needs lots of orders and would therefore agree to an exclusivity deal in order to get them. But this is the actual situation: Apple does not need Sprint, Sprint needs Apple.

There is simply no way Apple would agree to an exclusivity agreement with Sprint simply predicated on a certain volume of orders, even if for a short term; Sprint doesn't bring that sort of negotiation power to the table. What is more likely is that Sprint had to agree to a specific order volume just to get the device at all.

Your assuming that Apple had plans for a unique sprint phone anyways. What if they didn't?
What if Sprint came to you(apple) and said develop me an iphone... if you where apple had LTE in the works for verizon and ATT... and no plans for Sprint, what would you do?
Say.. 'sure why not and Ill do it for free'? This is what was negotiated... IMO it makes sense as a 'deal'.

Thats very possible. But again, Sprint WIMAX is different than Verizon/ATT LTE... so thats the out for 6 months. I have no proof one way or another, but can see the wimax coming out different timeframe than the LTE.

Tomorrow will tell the tale!

Actually, for some reason I'm getting twice as much article text from his quote than I am from the original article. I can only guess AI editors cropped the article down but due to his quote I get to see the whole thing. So I, for one, am glad for the quote.

Perhaps they cropped it since you can read it a few posts down. Going green by saving The World Wide Web a few bits at a time.

All of the thread articles are available on their own pages directly from AppleInsider's website.

Some have links to said page in the first post, others don't. Why not all of them do mystifies me.

and GSM, att has LTE phones its a simcard based system, nothing like CDMA

So there is all this hype about a new phone for Apple and customers are lining up. It is projected to be the fastest biggest selling phone Apple has had. There is an unmatched buzz about the new phone. Now a carrier comes to Apple and say hold on... we want exclusive rights to sell the new phone for 6 months and we guarantee 30 mill units being sold. So whats in it for Apple? They will sell more than 30 mill units in that 6 momths time frame anyway without even releasing to Sprint. So wheres the deal? Why would Apple agree to something like that? They can get those numbers without Sprint. Just because Sprint came to Apple and asked for the IP5 doesn't mean Apple has to make the deal. I imagine Sprint has been coming to Apple asking for the IP for quite some time now...... The number just don't add up for a business deal that would benefit both aprties. It works for Sprint but whats in it for Apple? Something they already have or would get anyway.....

I hope this is true because I've been camping out in front of my Sprint store for the last month.

You are indeed exclusive.

Selling ~8 million iPhones per year is not exactly a jaw dropping bet.

The article mentions that AT&T and verizon together sold 12 million in the first half of 2011. That's 3 million a quarter each. Don't they have something like 100million customers each vs 52million for sprint. Almost 2 million a quarter seems reasonable.

so you had advance infornmation?

I know the iPhone is popular and all that but... holy hell, was the accounting department asleep?

I can believe a purchase commitment of 1.9 million per quarter.

I just think this exclusivity thing is baloney. Let's face it, for Sprint to lock exclusivity of the handset, they would basically need to guarantee any potential revenue loss from other carrier sales.

They don't have the resources. How much revenue is Apple recording from handset sales each quarter? $13 billion? $15 billion? A number which is destined to climb?

This exclusivity thing is a joke.

Why do we assume that this is a bad deal? Why don't we assume they have done the math and see it as a reasonable risk?

He's also an avowed Blackberry user.

1) Even less to start if you want to average the average increase in iPhone sales per carrier with each revision.

2) They'd lose money with an exclusivity so it really doesn't make sense the way it's stated.

Yeah but how else could Apple obtain 20 billion in cash, or sell 30 million iPhones?

I just don't see how Apple could do it without exclusing ATT and Verizon.

Very smart

Yeah and meanwhile all my stocks went up today!

Explain to me how this helps Apple sell ONE MORE PHONE in the next 12 months than they would if they simply sold the iPhone to all three carriers? In fact, I'd love to see how Apple could sell as many phones in the next 12 months if Sprint had exclusivity over the next 3 months. It creates the SAME PROBLEM as Apple felt this year with Verizon users feeling they'd wait another "few months" before buying since it was just the "old" iPhone they were offered.

All that faith in one device. I'm not American so I do not know the specifics of the mobile network providers - but at last check, Sprint do not have that big a market share. Securing iPhones is clearly a way to grab market from the big boys Verizon and AT&T, but its a risky operation to put all that faith in only one phone. If Sprint said $20b to secure 30M HTC branded handsets we'd section them under the mental health act.

People need to face the facts. There is a very slim chance any iPhone 5 on any carrier is coming out. We havent seen ANY parts to anything but the 4S. We have seen so much to prove there is an iPhone 4S and almost none on an iPhone 5. I believe what was thought to be an iPhone 5 is actually a 3G iPod touch in the works. The people probably saw a sim slot and thought iPhone right away, instead of thinking 3G iPod.

That being said, I do not believe Sprint could get an exclusive deal on the iPhone. Not only because Apple would be losing revenue, but also because if AT&T or Verizon heard this and were given the chance, they would easily beat Sprint's offer. Also it would make no sense for Apple to put the 4S on the 2 biggest carriers and the 5 on the smaller carrier. If it were the other way around it would be more believable. Also Apple would not sell man iPhone 4S's if people knew they could wait 6 months and get the iPhone 5.

So basically, I do not believe any of this at all.

Unless? Unless WHAT?!? Unless you can guarantee you'll buy 1/5th the phones we would have sold without you? At no price premium? While we alienate 80% of our customers in the USA in the next 3 months? It's a good thing people on this forum don't run businesses.

Sprint may very well have committed to buying 20M phones in 4 years. But they didn't get any exclusivity.

Are you saying is a Sprint Wimax iP5 MUST come out the same time as a Verizon and ATT LTE iP5?

IF your presumption is that the Sprint phone is LTE also, yes makes sense Apple would not delay ATT/Verizon iP5 just for Sprint. But what if they are not all 3 LTE? I know, I know, but what if?

Are you saying is a Sprint Wimax iP5 MUST come out the same time as a Verizon and ATT LTE iP5?

IF your presumption is that the Sprint phone is LTE also, yes makes sense Apple would not delay ATT/Verizon iP5 just for Sprint. But what if they are not all 3 LTE? I know, I know, but what if?

What you say may be true if it is correct.

But for some on here its just having some fun speculationg back and forth... waste time at work

I agree with this 100%. The only way it makes sense is if this is like 3 months and then LTE comes out before Christmas on VATT. Even then, for all the reasons shown above, the exclusivity bit makes no sense.

If the rest of the world gets iPhone 5 with HSPA+ as one article I read alluded to, Apple's SKU count would skyrocket. Not what Apple is about.

iPhone is a world wide phone, not just a US phone. I was just in Japan for 3 weeks. I saw more iPhones in peoples' hands on the train, street car, subway, bus than I have ever seen before. Lots of Android too but a LOT of iPhones. Sprint would have to purchase 50-80 million IN ONE YEAR to make it financially worth while to Apple to give them an exclusive.

(And speaking of Japan -- Yodobashi Camera had like 3 or 4 aisles of iPhone accessories, covers, etc. All sorts of things I had not seen before as well. Wish we had that sort of store in the US)

Not everyone read every single news websites out there so nothing wrong with this.

You guys remind me of that scene from Family Guy where the donkey keeps insisting that Kevin Bacon wasn't in Footloose.

Apple to Sprint: "Why, sure, we'll let you sell the iPhone. But we got you by the balls. So we'll make sure you promote the iPhone above all competitor phones (Android, WinPhone, whatever) by forcing you to buy so many phones you'll practically be forced to encourage customers to buy an iPhone over a competitor."

Remind you of anything, oh, 15 years ago? How about this:

Microsoft to Dell: "Sure you can sell Windows, but you have to install it on every pc that goes out the door."

In both cases, the reseller (Sprint and Dell) are "highly encouraged" to sell your product at the expense of any other competitor product, because they have to buy such a large quantity that it basically accounts for everything they can sell.

Actually... S did take an extra >8% bite over T and VZ.

Ya i know its good to have something to think and speculate about (especially the iPhone), I was just saying my thoughts on it all.

Of course I too have been thinking hard as to what will actually happen tomorrow, and that is what I came up with. A little part of me still has some hope, and that little part of me hopes that Apple does something that just leaves us all with our mouths wide open...

Maybe like 'here is the new iPhone 4S'....blah blah blah and goes on for awhile about iOS5 and all that. Then at the end Steve Jobs comes out and says 'Oh and 1 more thing....here is the iPhone 5 with the same specs as the 4S for those of you who want a bigger screen. And we mananged to keep the retina display too!"

^That would be so awesome. One can only hope for something like that though

In spite of the ludicrousy of the idea that Sprint would have the iPhone5 exclusively for four years I do think it sounds logical.

Since the introduction of the iPhone it became immediately clear that mobile phone services were about to change drastically. First the iPhone introduced Visual Voicemail. A replacement for a succesful service then provided by carriers as an add on for which you had to pay extra. Visual Voicemail actually brought the data to your phone, which could be done by wireless connections as wel...

Then came the apps.. such as WhatsApp diminishing lucrative SMS services.
And Skype was among them, artificially prohibited on 3G networks but clearly capable in delivering mobile telephony at a fraction of the cost. At a certain point the iPod Touch became a serious alternative for having low cost telecommunication through local wireless networks.

Now... my guess is that the future of mobile telephony is internet only. Sure we need frequencies for that, but as long as carriers are not willing to ditch lucrative old fashioned services, Apple is not capable of innovating towards their (I guess unknown) vision.

So in order to improve this it might be an excellent strategy to team up with a carrier who has the guts and despair to innovate alongside Apple, who is large enough to gain traction and put competition in quality service back again for the top carriers. I'd say Apple single handedly is protecting competitiveness among the largest carriers. And I wish Sprint success in their desperate but bold jump back in the race. They might prove to be Apple worthy partners really innovating the telcom industry.

I too believe that the tear drop or wedge shaped cases floating around are for the 3G iPod Touch. Correct me if I'm wrong but if the next iPhone is to get an 8 Mpixel camera, that lens would be too thick to fit in the new case.

It makes no sense at all. Sprint has a small fraction of the customer base of ATT and Verizon. We nearly have a duopoly in the US.

If BGR is correct, the reverse will be true. Sprint will get a six month exclusive on the 5, and the other two will get the 4S for six months.