Sprint to Get iPhone 5 Exclusive: Report

Dennis Faas's picture

An unconfirmed report says Sprint has signed a deal to be the exclusive carrier of the iPhone 5. The deal supposedly involves a fixed order for 30 million handsets.

The stories come from two separate reports: one by the Wall Street Journal and another by industry website BGR.com.

The WSJ story appears to come from either a Sprint board member or somebody who has spoken to a board member. It says that in August the company's chief executive told the board that Sprint had agreed to buy 30.5 million iPhones across the next four years, regardless of how many it can actually sell. (Source: wsj.com)

Sprint, iPhone 5 Deal Could Take Years to Pay Off

The iPhone 5 deal would cost Sprint around $20 billion dollars.

It means that if Sprint sells the handset for around $199, it would effectively be paying about $450 to gain each customer. That's equivalent to several years of service revenue, even before you begin to take into account costs, which means that for the deal to pay off, Sprint would like have to retain customers even after an initial two-year contract runs out.

If the story is true, it really would be a make-or-break gamble for Sprint that could see it either become as big as Verizon and AT&T, or face severe financial problems. One estimate suggests that for the gamble to pay off, Sprint would have to double its current user base or convert existing customers to the iPhone.

Sprint Gets iPhone 5 Exclusive until 2012

The BGR.com report suggests that Sprint will be the exclusive seller of the iPhone 5 until somewhere between January and March next year, giving it five months to capture those customers who want the latest model as soon as it comes out. (Source: bgr.com)

In the meantime, AT&T and Verizon would have to make do with a separate new handset, the iPhone 4S. It would only have some minor improvements on the current model, notably a fancier casing and support for field communications, as used in "tap to pay" mobile payment tools.

Not only would the iPhone 5 include more memory, a larger screen and a faster processor, but it would also support 4G mobile broadband, meaning much quicker data transfers -- albeit for a higher monthly fee.

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