According to a recent report by the Wall Street Journal, Sprint has signed a monumental deal with Apple, which is reported to be worth a staggering $20 billion. This agreement will see Sprint carrying the iPhone 5 exclusively, a move that could significantly alter the competitive landscape of the smartphone market in the United States.
The deal is reported to last until 2014, and this would see Sprint buying around 30 million iPhones from Apple over the next few years. The device in question will apparently be a 4G WiMax device, which will be exclusive to Sprint, setting it apart from other carriers.
The Competitive Landscape
According to the BGR, Sprint would carry the iPhone 5, while AT&T and Verizon would carry the iPhone 4S. This does seem a little strange considering that both AT&T and Verizon have sold millions of iPhones for Apple in the past. The exclusivity deal with Sprint could be seen as a strategic move by Apple to diversify its carrier partnerships and perhaps to test the waters with a different network technology, given Sprint’s focus on 4G WiMax.
However, this exclusivity could also pose risks. Limiting the new iPhone 5 to just one carrier in the US might alienate customers who are loyal to AT&T or Verizon. Historically, Apple has expanded its carrier partnerships with each new version of the iPhone to maximize its market reach. For instance, the iPhone 4 was initially exclusive to AT&T but later became available on Verizon, significantly boosting sales.
Market Implications
The implications of this deal are vast. For Sprint, carrying the iPhone 5 exclusively could be a game-changer. It could attract a significant number of new customers who are eager to get their hands on the latest iPhone model. This could potentially increase Sprint’s market share and improve its competitive standing against AT&T and Verizon.
On the other hand, for Apple, this deal could be a double-edged sword. While it guarantees a substantial revenue stream from Sprint, it also limits the availability of the iPhone 5 to a single carrier. This could slow down the overall adoption rate of the new device, especially among customers who are not willing to switch carriers.
Moreover, the choice of 4G WiMax technology is intriguing. While WiMax was one of the early contenders in the 4G race, it has largely been overshadowed by LTE (Long-Term Evolution) technology, which is used by both AT&T and Verizon. This raises questions about the long-term viability of the iPhone 5 on Sprint’s network, especially as LTE continues to gain traction globally.
I guess we will find out later whether the iPhone 5 will indeed be exclusive to Sprint. At the moment, it is best to take this as a rumor until we get some confirmation from Apple. The tech giant has been known to keep its cards close to its chest, and official announcements often come with surprises.
Personally, I think it would be a mistake for Apple to limit the new iPhone 5 to just one carrier in the US. The broader the availability, the higher the sales potential. Apple has been trying to expand to more and more carriers with each new version of the iPhone, and this strategy has proven successful in the past.
Source BGR
Have a look at our iPhone 4S review to see what we thought of Apple’s latest smartphone, plus iOS 5 and their new virtual voice-activated assistant Siri.
Latest Geeky Gadgets Deals
Disclosure: Some of our articles include affiliate links. If you buy something through one of these links, Geeky Gadgets may earn an affiliate commission. Learn about our Disclosure Policy.
