WSJ: Sprint to bet the company on iPhone5

[boomhower]

A iPhone 5 with Wimax exclusive to Sprint, seriously? I can't believe they would actually waste the time and bandwidth on that article.

 

[NoStateofMind]

Sprint exclusivity until Q1 is plausible IMO. Certainly it would be easier to fit WiMax into a thinner phone at this point that an LTE radio.

 

[senseamp]

Hopefully they don't jack up prices on us V-Mo $25/month peeps to pay for this

 

[JS80]

Sprint/Nextel only has a market cap of 8.17 billion.

Hrm.

Add net debt and their enterprise value is $23b

 

[Dulanic]

That is fucking insane for Sprint to do. Sprint would need to convert all of it's customers to iphones... good luck! It really kind of pisses me off that Apple cost me a higher ETF fee and no more premier status. If it wasn't for unlimited staying.. which Sprint swears it will stay right now... I'd be gone.

I can't imagine that Sprint would do this without some kind of exclusivity for a certain amount of time. It kind of makes sense that they did get that however. Verizon looks to be getting the Prime exclusive for at least a couple of months.

 

[senseamp]

This might look like a really dumb move in a couple years.

 

[Bateluer]

Sprint may have made a poor move with WiMAX, in hindsight, but I don't see them as being this stupid. Nor do I see Apple being dumb enough to make a single iP5 with a WiMAX radio.

It'll be standard GSM and CDMA radios. I highly doubt any of the iP models will have a real 4G radio, HSPA+ at most.

 

[lothar]

What's your math? They generate $4b/year in operating cash flow, half of which goes to capex leaving them with $2b/year to pay down their debt. And they have $5b in the bank right now.

$20b commitment over 4 years = $5b/year. Consumers will pay up front money to buy iPhone, let's say $200 while Sprint pays $400 to Apple, leaving them with a 50% hole in CF in year 1. So with 60+ days AP turnover they will have more than enough cash to cover. If iPhone sales are not as stellar as their "bet" then they can renegotiate with Apple and start not accepting inventory.

Regardless, I thought LightSquared would be posting most of the capex related to LTE infrastructure?

30.5 million iPhones? Sprint only has 52 million customers.
Seems to me like Sprint is betting the farm.

As for LightSquared LTE infrastructure CapEx, that is correct.

 

[Pliablemoose]

Meh, BGR is full of it, why would AT&T stock iP5 cases if it'll be exclusive to Sprint?

With the volume the iPhone does, Sprint agreeing to sell a ton of iPhones isn't as crazy as it sounds.

Can't wait for the launch tomorrow.

 

[lothar]

Sprint may have made a poor move with WiMAX, in hindsight, but I don't see them as being this stupid. Nor do I see Apple being dumb enough to make a single iP5 with a WiMAX radio.

It'll be standard GSM and CDMA radios. I highly doubt any of the iP models will have a real 4G radio, HSPA+ at most.

They didn't.
If they didn't make the move to WiMax, they would have lost that spectrum.
Use it or lose it.

$20 billion is a lot of money...I'm to lazy to look it up, what is Apple's profit margin on the iPhone?
Paging Pliablemoose...

 

[Fox5]

Maybe they'll play some kind of crazy game:
Verizon and ATT get "iPhone 4S"
Sprint gets "iPhone 5"
And the phones are identical, except sprint's version uses Wimax, while the ATT/Verizon one is CDMA/UMTS. Which means ATT will offer speeds as fast as Sprint's wimax anyway.

 

[silverpig]

There's no way the next iPhone will be WIMAX only. Everyone else is going LTE, even Sprint themselves.

The only way this is true is if an LTE iPhone 6 launches the month after.

 

[Pliablemoose]

They didn't.
If they didn't make the move to WiMax, they would have lost that spectrum.
Use it or lose it.

$20 billion is a lot of money...I'm to lazy to look it up, what is Apple's profit margin on the iPhone?
Paging Pliablemoose...

~61% on the iP4, so about 12B profit over 4 years.

 

[s44]

This makes Sprint worthless to non-iPhans. Guess I'm sticking with Verizon.

 

[kaerflog]

I don't think it will happen but it makes some sense.
Theres rumor that Apple is in short supply of IP5 parts.
So if they couldn't provide enough IP5 for everyone, why not make some money for an exclsuive, lets say 3-6 months.
By that time, they will have enough IP5 to release for everyone.
There is some crazy sense to this.
Theres continuous rumors that Apple will only realease an IP4s but we all know there is a IP5 in the works.

 

[Mopetar]

We'll know for sure what's going to happen in less than twelve hours. Not much sense in speculating at this point.

 

[poofyhairguy]

So glad I am not on Sprint. It is obvious that Sprint's play will be "The Only iPhone With Unlimited Data Still!" Goodbye Sprint's network....

 

[Dulanic]

Meh, BGR is full of it, why would AT&T stock iP5 cases if it'll be exclusive to Sprint?

With the volume the iPhone does, Sprint agreeing to sell a ton of iPhones isn't as crazy as it sounds.

Can't wait for the launch tomorrow.

It sounds absolutely insane. Considering Sprint has ~50 million customers, that would mean in the next 2 years nearly 2/3 of Sprint's customers would need to upgrade to the iphone. Here is the issue... less than 1/3 of phones sold are iphones. And even less probably upgrade nearly as often as us crazy users do.

Or Sprint would need to gain at least 10 million customers for the iphone. Considering every carrier (except TMo) carries the same phone, they can't expect to gain THAT many customers.

 

[Fingolfin269]

Or it could be that Sprint thinks it's gamble will expand it's base to some number greater than ~50 million. After all, they're still dangling that unlimited data carrot.

 

[Fire&Blood]

For the consumer's sake, I wish Sprint could put a dent in VZW or AT&T's numbers. Even if this rumor were true, Sprint might actually attract more of the T-Mo crowd for the iphone but I don't think they can attract massive defections from VZW or AT&T.

 

[lothar]

Their stock was down -10% yesterday on news of this report and it's down another -10% today again.
Those people who jumped on Sprint in the stock market thread 1-2 months ago might lose their shirts if they bet their farm on Sprint the same way Sprint is betting their farm on the iPhone.

 

[alent1234]

why would anyone buy sprint stock?

 

[lothar]

why would anyone buy sprint stock?

I have no idea.

Ask them.
http://forums.anandtech.com/showthread.php?t=2132168

 

[JS80]

30.5 million iPhones? Sprint only has 52 million customers.
Seems to me like Sprint is betting the farm.

As for LightSquared LTE infrastructure CapEx, that is correct.

If Sprint is unable to sell the "committed" contracted amount, they will just force Apple to the table and renegotiate or breach the contract out right. The 30.5 million number just means the commitment to sell at ass rape rates as long as the sales meets to the contract.

 

[finbarqs]

come on iphone!!!!