Wednesday, August 24, 2011 at 12:29 pm.
iPhone for Sprint: Long-term gain but short-term pain
This is ultimately good news for Sprint, which has struggled to compete with the iPhone over the years. (Remember the Samsung Instinct?)
While many former Sprint customers — including me — left the carrier long ago to get an iPhone from AT&T, there are still likely millions of current Sprint subscribers who would want to upgrade to an iPhone. One analyst, Piper Jaffray’s Gene Munster, estimates that Apple could sell an extra 6 million iPhones next year through Sprint.
Going forward, this could mean lower churn for Sprint and possibly even an opportunity to steal customers from other carriers, if it continues to offer a good value on phone service. This means more subscribers and more revenue for Sprint — good things.
But in the short term, this could be costly for Sprint:
- Subsidizing iPhones is likely to be more expensive than Android and BlackBerry devices.
- Sprint may also have to invest more than planned into its 3G network to support additional demand.
- As a result, profitability — an area where Sprint already struggles — could take a big hit over the next couple of years.
- And with a more level iPhone playing field, Sprint may lose leverage in its bid to disrupt AT&T’s purchase of T-Mobile.
(But still, over the long run, it’s worth it.)