Sprint-Nextel (NYSE: S) did not get the Apple (NASDAQ: AAPL) iPhone. Verizon Wireless did. Analysts say that Verizon may have to pay $2.5 billion to purchase iPhones this year. It cannot make that money back quickly through the two-year subscription plans that go with each iPhone it sells. AT&T (NYSE: T) had the same problem. It paid nearly $600 for each iPhone it sold to consumers. That amount will come down now that it has lost its exclusive right to sell the smartphone.
AT&T is supposed to be the loser in the Verizon deal to sell the iPhone. That is probably true. AT&T iPhone sales will be hurt by competition from Verizon. Some subscribers may even leave AT&T and its faulty network to become Verizon customers.
Sprint-Nextel has some popular models which its offers its customers. It also has a 4G network in place, based on WiMax technology. Consumers have already started to use new Sprint products because its network is so fast. But, customers are not in a rush to get HTC Evo products, Samsung Galaxy tablets, or Palm Pixis. These do not measure up to the iPhone and iPad as far as the public is concerned.
Sprint may not have been offered a partnership by Apple. Jobs may believe that he can sell more iPhones if they are available to only customers of the two largest wireless firms based on subscribers. Apple may be concerned that Sprint does not have good customer service and that it is considered an also-ran in the wireless business.
Sprint will lose customers to Verizon Wireless because of the availability of the iPhone just as it lost customers to AT&T. That is one more reason Sprint may not survive, at least as an independent company. Jobs has more power over the wireless industry than even he realizes.
Douglas A. McIntyre
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