Tuesday, October 4, 2011

The iPhone 5 And Sprint's Big 20 Billion Dollar Gamble

According to Sony-Ericosson president, Bert Norbert, they may have under estimated the impact of the iPhone, but one company isn't taking the chance that they'll ever under estimate it again by basically betting the whole company on the iPhone 5.

According to an exclusive report by BGR, Sprint has decided to gambled on the iPhone big time, and by big time I mean by agreeing to buy 30.5 million of the little suckers over the next four years at a cost of a whopping 20 billion dollars! Whoah.... baby, now that's what I call a whole lot of cold hard cash!

Under the deal, Sprint will get a chance to trump its main competitors, namely AT&T and Verizon, by getting a first shot exclusive deal to sell the iPhone 5, while its competitors are limited to selling just the iPhone 4 and iPhone 4S, at least until the first quarter of 2012.

A lot of people, myself included, find it hard to believe that Apple would limit the sales potential of the iPhone 5 to just one company. After all, that's one of the main reasons why Android was able to come along and steal most of the iPhone's sales in the first place, thanks in large part to its five-year exclusivity contract with AT&T.

However, 20 billion dollar in guaranteed sales is nothing to sneeze at either, and especially when you consider that the first quarter is only five or so months away anyway. Also, when combined with Sprint's no-data cap plans, having the iPhone 5 appear on its network first, even if its only for five months or so, could go along way in helping Sprint in not only keeping its existing customer base intact , but hopefully also give it the chance to actually grow its base at the expense of its much larger rivals.

In conclusion, having a short term exclusivity contract with Sprint might have minimum impact on over all iPhone sales, but it could easily have a big impact on Sprint, a company that can use all the help it can get these days. After all, according to Sprint not having the iPhone is already the main reason its subscribers are leaving Sprint, so it basically has nothing to lose and virtually everything to gain by having an iPhone exclusivity, as short as it might be.

And that's my 2 cents 4 this cold, wet and dreary Tuesday, October 04, 2011

iPhone 5 mock up via: BGR via MacRumors

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