Sprint to Be Exclusive iPhone 5 Carrier? I Don't Think So.

Jeff Weisbein -

BGR reports that Sprint may have secured exclusivity of the iPhone 5 leaving AT&T and Verizon with the watered down iPhone 4S.  Is this true?  I find it hard to believe.  According to the article, Sprint would be committed to purchasing 30.5 million iPhone’s over four years for $20 billion regardless of whether how well they sell.  That would lead to a nice chunk of short term cash for Apple, but in my opinion would have detrimental long term effects.

Additionally, the article goes on to say the Sprint iPhone 5 will be a 4G WiMAX device.  Meanwhile, AT&T and Verizon would launch the iPhone 4S and get the iPhone 5 some time in the first quarter of next year as an LTE device.  The rest of the world would be looking at the iPhone 5 as a 4G HSPA+ device.

There are a few things that should lead you to question the validity of this rumor.  It’s important to remember that Sprint is planning to make the switch over to LTE within the next year or two.  It doesn’t make sense that they would make such a commitment to a WiMAX device at this point in time.  And let us not forget, Apple’s success in recent years has been propelled by consumers who love its products.  I just don’t see the company upsetting the masses this way, especially since Sprint is the 3rd largest network in the US — it’s not even close to AT&T in terms of network or customers.

Apple would have a lot to lose if they tied up the iPhone 5 with Sprint for a while.  It would make a lot of customers unhappy.  I’m not even sure customers would be willing to switch over the Sprint to get the iPhone 5 the same way they did when AT&T had iPhone exclusivity.  The difference this time is there is an alternate choice for consumers (AT&T or Verizon), who provide better overall coverage.  By providing Sprint with iPhone 5 exclusivity, I think would make some customers think twice about Android.  Not to mention, I don’t think Tim Cook wants to make a bad impression on his first launch.

Also from a financial perspective, Sprint’s market cap is a mere $8.17 billion and they are making a $20 billion commitment?  Talk about betting the ranch here.  For a company of that size, there is no question that a commitment of that magnitude is a big bet.  In fact, Sprint would not even break even on the deal for about 3 years.

I do think Sprint is committed to getting the next iPhone and I think they will be on the list of carriers tomorrow that will have it.  I just don’t think they will be the exclusive iPhone 5 carrier.

If this were to happen, this is how it would play out tomorrow.

The iPhone 4S Apple will introduce tomorrow for AT&T and Verizon will feature the following:

  • A low voltage Apple A5 CPU (not the exact same as the iPad 2’s).
  • Updated front and back camera sensors. FaceTime HD in the front, 8-megapixel 1080p HD video recording in the back.
  • NFC support.
  • Metal or “premium” plastic on the back case.
  • Multiband 3G Qualcomm chipset — North American & International GSM/UMTS/HSPA bands for AT&T and Global carriers, North American CDMA & International GSM/UMTS/HSPA bands for Verizon and Sprint.

And the iPhone 5 that Apple will announce tomorrow for Sprint will feature:

  • Faster CPU.
  • Larger 4-inch screen, similar to LG’s NOVA display but with a higher resolution.
  • 1GB of RAM.
  • Slightly larger design overall, but thinner and with a larger battery.
  • 32GB of storage.
  • iPhone 5 exclusive software and APIs (Assistant).
  • Dedicated Assistant button, possibly integrated with the new home button, “think gestures or a two-stage button like a camera shutter key).
Again, I don’t see it happening.  I really hope it doesn’t.  What do you think?