Sprint Talks Profits (Or Lack Thereof), Impact From The iPhone 4S
With the arrival of the iPhone 4S, Sprint finally got what it’s been wanting for years: a piece of the Apple smartphone pie. How’s that working out for the carrier, just what did it end up costing, and how’s Sprint network handling the new users? Sprint just revealed its third quarter figures, while commenting on the state of the iPhone, giving us a few answers.
Before we knew Apple wouldn’t be releasing an iPhone 5 this year, we got news of a reportedly $20B deal Sprint had made with Apple to guarantee certain iPhone sales of the course of the next four years, supposedly in exchange for an iPhone 5 exclusive. Even without the iPhone 5 bit playing-out, Sprint revealed it’s still on the hook for something like $15.5B, but it’s more than happy to be paying that figure, expecting iPhone users to still turn the company a profit.
Even with iPhone subsidies costing Sprint much more per-phone than any Android or WP7 handsets, that should be offset by income from service contracts. Part of the reason why Sprint expects to clear so much off this user group is that it reports iPhone data use as falling substantially short of Android’s figures. We were worried that iPhones on unlimited plans might cripple Sprint’s network, but apparently they’re far from being bandwidth hogs.
As far as third-quarter subscriber figures go (which are too early to reflect iPhone sales), Sprint took on about as many new subscribers as Verizon did, with about 1.3 million, and churn is down a bit from this time last year. Sprint’s still reporting quarterly losses in the range of $300 million, but that’s a just a third of the Q3 2010 figure.