Sprint Gets Ahead of the Next iPhone

Most wireless carriers hate to love Apple’s (Nasdaq: AAPL  ) iPhone, but that’s not stopping Sprint Nextel (NYSE: S  ) from betting big on the device. The third-largest domestic carrier has committed to $15.5 billion in iPhone purchases over the next four years, regardless if it can sell them through to users or not.

So far, Sprint has sold a cumulative total of 4.8 million iPhone units in the three fiscal quarters since it got its yellow hands on the device late last year, when Apple unveiled the iPhone 4S. The company also added the device to its prepaid lineup available on its Virgin Mobile brand, following in the footsteps of Leap Wireless’ (Nasdaq: LEAP  ) popular prepaid Cricket Wireless service. Interestingly, Leap opted not to disclose how many iPhones it sold last quarter, saying, "Results are early, and we will update in the coming quarters."

By the looks of it, Apple’s next iPhone may be imminent, with September 12th being rumored as the fateful day that Cupertino will take the wraps off a redesigned handset. Ahead of the anticipated release, Sprint has even now taken the aggressive step of slashing the contract price of the iPhone 4S by 25%, from $200 to $150, attempting to coax consumers that presumably aren’t aware of what’s on the horizon in just over a month.

Source: Sprint.

The iPhone is typically very resistant to discounts and sales; other devices may see prices drop within months after launch, like Nokia’s Lumia 900 that was recently cut to $50 on contract.

Sprint’s move also goes to show how aggressive it’s willing to play the iPhone relative to its larger iPhone-equipped rivals AT&T (NYSE: T  ) and Verizon (NYSE: VZ  ) . Both Ma Bell and Big Red are standing pat at $200 for an entry-level iPhone 4S, signaling that they’re not willing to eat any discounts for Apple’s benefit. There were also recent reports that AT&T sales reps are told to nudge users towards Google Android and Microsoft Windows Phone devices, since those devices carry lower subsidies. AT&T staunchly denies the allegations.

Sprint’s betting big, and going for the jugular. Now it needs to catch up with its LTE rollout if it has any hopes of seeing meaningful sales of the next iPhone, which is widely expected to feature LTE speeds.

The next iPhone is expected to see unprecedented upgrade activity among users, which is one reason Apple still has upside. For more, sign up for this brand-new premium research service that's all Apple, all the time.

Fool contributor Evan Niu owns shares of Verizon Communications, AT&T, and Apple, but he holds no other position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of Google, Apple, and Microsoft. Motley Fool newsletter services have recommended buying shares of Apple, Google, and Microsoft. Motley Fool newsletter services have recommended creating a bull call spread position in Microsoft. Motley Fool newsletter services have recommended creating a bull call spread position in Apple. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


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