BGR is reporting that the iPhone5 may be a Sprint exclusive. That's pretty big for Sprint. Explains why Sprint has been completely mum about Windows Phone Mango. If this is true, it might be time for me to leave Sprint.
The likelihood of Apple giving Sprint an exclusive to their newest device this late in the game (ie, they're not an unknown quantity like they were in 2007) is highly unlikely.
Where one to entertain this crazy notion though the reasoning could center around Sprint's WiMAX deployment and the iPhone 5's need for higher bandwidth. Should the much rumored "Assistant" feature of the new iPhone require a bigger pipe to the Internet to function, then this could be plausible.
Yet in the end, why? Apple has only expanded their supported carriers since 2007. Centering on Sprint in the hope of forcing the hand of AT&T and Verizon in the US is a fools errand. They would be effectively shrinking the market they worked so hard to expand into. Seems nuts.
The Sprint exclusivity would probably be a short period, like 6 months. Apple could milk payola money from Sprint. Sprint could sell AT&T and Verizon switchers new contracts. 6 months later, Apple lets AT&T and Verizon release iPhone 5s to soak up any cheapskates that want to upgrade but did not want to break their AT&T and Verizon contracts.
If Apple made the iphone5 a Sprint exclusive, it would be unavailable to every single one of their existing customers. Literally...Every...Single...One.
There's a better chance that Tim Cook will eat an iPhone than announce a Sprint exclusive.
I'm out of contract on AT&T with a 3GS. The exclusive 5 on Sprint would be available and very attractive to me. Granted, that doesn't make it a good idea, but going exclusive with Sprint doesn't eliminate EVERY current iphone owner from upgrading.
Yah, exactly. Most of the people I know still in contract with AT&T are waiting to jump ship to whatever carrier will have the iPhone 5. My gf and I are both a year in on our iPhone 4 contracts with AT&T and we have no problem dumping them.
You have to figure how much is your time really worth?! All the AT&T network b.s. (esp in San Francisco & NYC) that we've had to deal with costs me and my gf much more than the cancellation fee ever will. That said, the cancellation fee is still a load of crap.
I wonder how true this is outside techies. I'm personally network-agnostic, as I only use my "phone" for data and calls from the wife. I use about 100 minutes a month, so it doesn't matter.
My wife, however, makes at least 60 minutes of calls on more days than not, keeping in touch with friends and family (basically all the social lubrication I do with email and Google+). For her, the network effect is incredibly strong: all her friends and family are on Verizon, so she is very hesitant to switch as she gets the in-network minutes free. It was a huge deal for her when I announced I wanted to leave Verizon (for a Virgin Mobile Android) and how many minutes that would add to her plan.
I think a lot of people are loyal to their network not because of what they get from it, but about the people they know on it.
> For her, the network effect is incredibly strong: all her friends and family are on Verizon, so she is very hesitant to switch as she gets the in-network minutes free.
Sprint has unlimited mobile to mobile for plans with data, so as long as the other person is on a mobile line (probable since they are on Verizon), the call is free.
I wouldn't say that customers are exclusively device-loyal and network-agnostic. The convenience of using the same device can be outweighed by frustration over the network's coverage, downtime, etc. Everyone has different breaking points, but I guarantee that if you couldn't get reliable service where you spend most of your time, you'd strongly consider a different device!
There are rumors of a 4S, though, with the upgraded A5 inside an iPhone 4 form factor. Which, in such a situation (and I agree it's not likely), could go to the other carriers and make the 5 a Sprint exclusive.
(Again, doubtful, but it would address that problem.)
It's completely ridiculous. 30 million iPhones over 4 years is about half the rate at which AT&T is currently selling iPhones in the US. Why would Apple give exclusivity to a lagging carrier in exchange for a promise to purchase phones at only half the rate that one of their current partners is selling them?
It seems likely to me that Sprint made this commitment in order to get access to the iPhone at all. But an exclusive on their network makes no sense at all for the relatively small deal (from Apple's perspective) being described here.
- It may not possible to produce an LTE iPhone 5 for either Verizon or AT&T right how (or for any other country), as the LTE chipsets are not ready and LTE deployments are limited. However, it may be possible in six to nine months.
- WiMAX chipsets may be more mature than LTE, and Sprint's LTE deployment may be widespread, making it possible to produce such a phone for Sprint.
- Sprint has promised to buy 7.5 million iPhones a year, which is a whopping 31% of US iPhone sales
- The depth of the Sprint commitment effectively means there is no room for Android on that carrier.
So, if Apple's choices are:
a) Produce non-LTE phone for AT&T and Verizon, only to obsolete it six months later in order to compete with LTE phones running Android.
b) Give Sprint temporary six to nine month "exclusivity" to a phone that they could not produce for anyone else anyway in return for 30% more U.S. sales and killing Android on Sprint
Yes, but WIMAX is pretty much dead, even Sprint's dropping it for LTE. I just don't see Apple producing a new phone with WiMAX and having to test a completely different radio technology when they pretty much know it won't last for more than a few years.
I can believe this story. Apple spins it that Sprint is ready now, AT&T and Verizon need to get their LTE networks ready. It'll be a very public push. Apple has never shied away from telling their "partners" exactly how annoyed they are at [X] facet of their business.
If this did happen, I'm not sure what the knock-on effect for Sprint is. Anyone who wants an iPhone has one. The Verizon thing is over. All those people are locked into contracts. I don't think we'll see lines out the door on release morning for iPhone 5 and Sprint.
The AT&T 3gs crowd joined in June 2009, and many of them (myself included) are just out of contract and waiting to upgrade to the new phone. I think there's plenty of demand, especially if its not an ATT or verizon
I could also see it as retaliation for dropping all non-unlimited texting plans after iMessage was announced, or for changing iPads from unlimited data to 2 GB/month shortly after release.
I know a few people still on the 3GS, out of contract, and looking for an upgrade. If the iPhone 5 came out on another carrier (especially with an unlimited plan), they'd be happy to jump ship.
All those millions of people who bought the 3GS when it was released are now at the end of their 2 year contract so it's a perfect time for Sprint to make a play for them. If they discount the upfront price of the iPhone, offer unlimited data, and $50/month service lots of people are going to jump.
God yes, I love my 3gs, but its long in the tooth now.
Just give me a decent amount of minutes I'll never use, maybe 4-5g data/mon with no tethering and unlimited texts for something close to what the Europeans get service for. If carriers want to play price war, its about damn time. AT&T and Verizon aren't going to play that ball unless someone blinks.
That seems very unlikely, although it would certainly make me consider switching to Sprint (after doing lots of research into their network quality in my area, etc.).
Their stock (which I unfortunately hold a bit of) dropped over 10% today. If that's the case, I hope they announce it rather than let the speculation continue.
I know I'm surely in the minority here but back in August I was so fed up with AT&T that I spent most of the month planning a move to Sprint. I was in and out of stores, researching phones online, talking to friends and more. Even with their poor coverage (my parents live in western mass and basically that entire side of the state is a black hole for sprint) I was so close to making the switch, at least for a one month trial.
The main reason I wanted to switch to Sprint was they seemed to be really for the consumer and pushed that they offered Unlimited Data. Most months I stay under 5gb (though its close) on my android phone but occasionally I travel and do use quite a bit more.
Before I did sign up though the rumors started coming out about the iphone coming to sprint which I immediately predicted would kill their unlimited data deal, which though its not on the phones themselves yet has been enforced on hotspot users.
I know people love their iphones but I just really hate how it is ruining networks for everyone. Every network they move to kills their unlimited data plan with their arrival. :(
Usually they'll grandfather in unlimited plans that are in place before they kill them, though. I still have an "unlimited" data plan from Verizon, which, as I understand, will unfortunately not transfer over to an [EDIT: unlimited] LTE plan.
So, you should look into it, and if you're still planning to switch, you should probably try to do it before the iPhone comes out.
I have an unlimited data plan on Verizon, and was told last week it could transfer to LTE. (Didn't make the switch though; I opted for the Droid 3 and its physical keyboard.)
I don't know why you are getting downvoted. I've been involved in and also seen plenty of corporate cellphone deals where the carrier promises stuff (on paper, even) and then never delivers. "Billing mistakes" drag on and on, costing the customer huge bills they supposedly weren't going to get, etc.
On the consumer side, I've seen plenty of helpful customer service people do something slightly wrong and then the customer is locked out of their grandfathered plan or whatever else.
So yes, I agree. What they say and what is true don't always have anything to do with one another.
(One caveat to this is that sometimes only a few people know how to do something, and to everyone else it is "impossible." Sometimes this is poor training, and sometimes it is a rep who knows how to cheat the system a bit for a better customer experience.)
May be someone could answer a question I have for a long time.
There are two different modes of operations wrt the mobile phone industry. US and most other European countries package phone and services together. Whereas in a lesser sophisticated market like here in India phone and services are independent of each other.
Both have their own pros and cons -
Here I would never choose a crappy network because they have a better phone (I buy the phone of my choice) but at the cost of paying an extra premium (and that's quite a bit) for the phone (and the freedom to switch network anyday).
The advantage wanes away as more operators provide better choice (but there is always the possibility that a phone maker could enter into an exclusive agreement).
Which of these models would result in a better service for the customer? Which is likely to succeed (or rather, be more successful)?
I worked with carriers on handset pricing strategy so I'm familiar with this issue. There is a reason many country telecom regulators ban subsidization of handsets - in most cases bundling is anti-consumer.
Bundling uses a common pricing psychological trick - by reducing the fixed price (i.e. the phone price) but increasing the variable charge (i.e. the monthly bill) the consumer has a perception that the deal is "cheaper". I'd venture to say that the wealth level of consumers who buy high end smartphones in the US is lower than those who do in other markets - essentially the lower one time charge encourages consumers to buy phones they really can't afford (it's like layaway for mobile phones). Furthermore, the consumer is locked into a long term contract (usually 2+ years) so they can't churn.
Finally, carriers can exploit uninformed consumers. For example, you can offer two free phones with a plan, one of which has a cost of $300 and the other $200 to the carrier. You can list both phones at a fake MSRP $350 making both phones seem like equivalent deals when in fact consumers who buy the $200 phone are essentially writing a $100 check to the carriers. Since carriers bundle phones with the service and most models are carrier specific, there is no perception of the actual value of a phone and thus, it's really easy to do this.
In general, the US market is pretty anti-competitive because of
i) bundling
ii) carrier locked phones
iii) lack of pre-paid options (esp on the high end)
iv) long term contracts
v) CDMA networks which prevent re-using phones with another carriers
So in general US customers get a raw deal when compared to other markets (don't get me started on how we get charged for incoming calls and SMS). On the plus side, we do tend to get coolest phones first.
Actually, the way it works in the US ends up being a lose-lose situation for consumers. Phone prices tend to be lower, but at a cost of an increased contract price. Over the course of a two-year contract, people will pay more than the cost of the subsidy of the phone.
The only way to beat this is to buy phones out of pocket and get a plan that doesn't require a contract. However, you'll still lose out on flexibility, because the companies in the US use incompatible technologies.
Fun fact: the incompatible technologies were originally conceived of as a way to increase competition between phone companies. Guess what effect they actually had!
> US and most other European countries package phone and services together. Whereas in a lesser sophisticated market like here in India phone and services are independent of each other.
A lot of Europe also purchases the phone and the services separately.
> Unlike its rivals, Sprint also will almost certainly offer unlimited data plans for new iPhone buyers, since it is a clear competitive advantage, one person familiar with the matter said. The company believes the combination will allow it to poach customers from Verizon and AT&T, the person said.
> "Five years ago, the Motorola Razr was the top-selling phone," says
> Credit Suisse analyst Jonathan Chaplin. "Imagine trying to sell 6
> million of them today."
The thing about the RAZR is that it was a sleek, small form factor. I don't remember anyone who had one tout its functionality as the reason they got it. So the next sleek phone or better featured phone could easily displace it. The iPhone on the other hand combines excellent engineering of its hardware with tremendous strength in the software; not to mention the brand cachet. That's a significant competitive advantage and is harder to displace.
The RAZR is still pretty much the epitome of "just a phone" in contrast with modern smartphones. Nothing really surpasses it, save for Verizon crippling them. Optimize it for what it will be used for, instead of making it do what users don't want, and it would sell well unto 6 million today.
There are plenty of us who have suitable portable computers (iPad in particular) who don't want an iPad Nano overlapping functionality.
The RAZR I had just prior to getting an iPhone was a horrible experience. It looked nice, the hardware seemed to function ok, but the software was terrible. When navigating the menus, no matter where my thumb was, the next press needed to be on the opposite side of the keypad. I don't remember what my phone before it was (Nokia maybe?), but I remember my thumb was always were it needed to be. I hated that RAZR. Thinking about it brings up feelings akin to fingernails on a chalkboard.
Actually, I remember numerous friends describing the original iPhone as having terrible reception. An old boss switched to skype for phone calls so he could keep using his iPhone for its apps (or something).
It seems more like the iPhone combines generally good-but-not-fabulous engineering with the continued irrational loyalty of "Apple Fanboys".
Edit: But this too may indeed be a competitive advantage that's hard to match...
Yes. That's how mac works. The instant anyone ever purchases an apple product, they are irrevocably an apple zealot.
Frankly, I'm surprised they haven't organized into a massive armed malita, given the amount of hatred and bigotry apple fanboys bring to a discussion. It seems like the complete solidarity of everyone to ever pass a credit card to Apple would make them a formidable force.
I guess design doesn't count towards the success or usability of the iPhone's "irrational" loyalty? Android is waiting with open arms for your "rational" assessment of technology. Enjoy them.
I like my Sprint service. The reception is far from legendary, but it's there, and the data is unlimited. If I wanted an iPhone, I'd do what everyone else does and switch to AT&T (and now Verizon). I suspect that folks who really care that it's an iPhone and not an Android (or potentially WP7, if that ever gets off the ground) have already made their move.
I like Sprint too, but I disagree. Sprint's pricing has historically been too good to leave to another carrier. Even you want an iPhone -- can you really justify the price hike for it? It's actually a much better deal, even in the short term, to get an iPad with 3G than move your cell phone service to ATT (especially if you have a family plan like I do).
I think if the iPhone comes with the same price plans as today you'll see Sprint sell a boatload of iPhones.
I suspect that folks who really care that it's an iPhone and not an Android (or potentially WP7, if that ever gets off the ground) have already made their move.
Remember, though, that the smartphone market is far from saturated. You could argue that it's barely been tapped - dumbphones still compose the vast majority of the U.S. phone share. Upgrading from a 3 year old dumbphone is a prime opportunity for a consumer to rethink their phone carrier. I imagine Sprint lost a lot of first time smartphone buyers to the iPhone thanks to Apple's "easy-to-use" reputation and the massive hype of every iPhone debut.
Agreed, and I think we saw as much with the iPhone arrival to Verizon. Yeah, it was a bump for Verizon, but not a tidal wave. Most people who wanted it had moved. That said, I think there were some holdouts who were unsure about getting an iPhone4 so close to the supposed summer release of an iPhone5, so that probably depressed the Verizon numbers a bit too. Bringing iPhone to Sprint so soon after a new announcement should take some of that uncertainty away.
Also, a lot of people on Verizon who wanted a smartphone probably had already bought an Android phone when the Verizon iPhone came out (I know I did). The original Droid is just about two years old, which means that a lot of Droid owners are going to be looking for a new phone in the coming months. I'd bet a lot of them will be getting iPhones. I know a lot of friends that have Droids, and none of them have any intention of getting anything other than the iPhone when their contract is up.
Probably a combination of both, but I doubt it really matters either way—at the end of the day, they had a poor experience with an Android phone, and they don't want to have that happen again.
The unlimited data that Sprint gives you is not supposed to be for tethering. If you want the tethering app on Android to work, you need to pay Sprint a monthly fee of $30 a month. [1]
I have a hunch that this will apply to the iPhone too. Of course, you would be able to jailbreak then tether, but I'm not sure how many ordinary users would be willing to do that.
According to my first reference below, tethering will also be capped at five gigabytes with the launch of the iPhone. So, you'll have to pay $30 for tethering five gigabytes a month. The internet on the handset will still be unlimited.
Supposed is the keyword. Once you root/jailbreak the phone, nothing is stopping you from using WifiTether/Tetherme for your tethering needs.
If youre a power user and require over 5GB a months, then youre in trouble. But for most of us that need tethering for those select moments we're away from wifi, its a godsend.
Sprint runs a CDMA network. I don't believe Apple sells unlocked CDMA iPhones, only GSM. Maybe that will change when the next model supposedly combines GSM and CDMA antennas in a single model.
Maybe I'm missing something, but why bye an unlocked phone? You pay more up front and the same monthly fee for network access. Is it just the contract you don't want to enter?
The price of the phone is the same whether you pay upfront or through an increased monthly fee, but with the unlocked phone I can pop in a local sim-card if I travel, and I can change my provider whenever I want.
The only benefit for the locked ones are that you get to buy it on what is essentially cheap credit, but it's not like you save any significant amount of money on that.
It would be great if someone could come up with a summary of the offerings by the big 3 carriers; and the quality of service on the network. I'd love to switch to Sprint, but I'm not sure how their cellular network stacks up to ATT/Verizon when in remote areas. I'm on ATT currently, and was surprised to get reception at the top of HalfDome (though I have trouble getting it in my neighborhood in SF :-/ ).
If Sprint keeps unlimited data for at least the 2 years that I'll be on contract, I'll sign up for Sprint the day the iPhone 5 is available. Sprint needs to compete on price and unlimited data to compete with Big Red and Big Blue and stay alive.
If Sprint gets an exclusive on iPhone 5, there is going to be severe backlash. I know many people waiting to upgrade their phone until iPhone 5 comes out, and they aren't going to switch to Sprint to do it.
This would be a betrayal of all of their customers holding iPhone 3G/3GS/4 waiting to upgrade on Verizon or AT&T, and it will be a big chink in the armor for Android to exploit.
It would annoy me as a developer too.
For these reasons, I sort of find it hard to believe that an exclusive is possible, but I guess $20B is a lot of money.
There's no 3G/3GS on Verizon and exactly zero iPhone 4 Verizon customers are eligible for a subsidized upgrade yet. So it only affects the tiny number of customers who are going to pay $600 for an out-of-contract upgrade. The vast majority of Verizon iPhone owners would have to wait for their subsidized upgrade date which for most is March/April 2012 at the earliest.
For AT&T customers things are a bit more tricky. Any iPhone 4 owners are in the same boat as Verizon customers. Most won't have a subsidized upgrade available until late December. (if you have a more expensive plan with AT&T your upgrade date is earlier) This also goes for people who bought the 3GS in the last 14 months. The people who opted for the 3G in the last ~20 months decided to buy a low end model. For them the iPhone 4 or 4S would be the natural upgrade path and a massive upgrade.
No doubt there are some risks but I doubt Sprint would have a very long exclusivity period so even if Apple takes a beating for a month or two it will be of little consequence compared to $20B in the bank.
But it's not $20B in the bank, it's a commitment to buy $20B worth of phones over four years. Assuming 50% margin on Apple's side, this deal is worth about $2.5B/year. Compared to Apple's revenue of $65B/year or profit of $18B/year, this is peanuts, and not worth any sort of beating, especially since many of the sales they would make from such a deal would not be new, but merely shifted.
You have to compare it to the alternative -- how many sales on Verizon / AT&T will they lose with this exclusivity? How many phones would they sell on Sprint if it was available there, just not exclusively?
If sprint throws in tethering for those two years they will certainly poach a lot of customers. But with their overall network quality, it's likely that they suffer an AT&T style meltdown. Their 3G speeds are already the slowest of all national carriers, and an LTE rollout looks far off.
I am unsure that lack of iPhone is Sprint's sole big problem. For some time now they have messed up with 4G and their 3G speeds aren't anything to write about either. And last time I drove through the US across 4 states my wife's Epic 4G had the least coverage.
And iPhone is more available today - you can buy it unlocked, you can buy it on AT&T or Verizon. So the only people that are really going to buy iPhone on Sprint are the smaller number that have only Sprint coverage (theoretical - not sure if that is valid) and only want an iPhone. The second smaller group will be the people within Sprint's 4G coverage areas that like Sprint's data plan better - as the speeds aren't all that great on WiMax compared to competition.
I'm not sure I understand. Is Sprint planning on undercutting the "regular" subsidized cost of the iPhone? Because otherwise, unless they're going to do something that really stands out, it seems like a case of "the only way to beat them is to be exactly like them".
At the moment, they're the only major carrier to offer non-capped unlimited data, and their "simply everything" plans (unlimited talk/text/web) are as cheap or cheaper than the Verizon/AT&T equivalents.
Although exclusivity is hard to believe, the only thing that makes this plausible is that it makes sense for Apple to want multiple carriers for their products, each with lesser influence, than one or two major carriers with major influence.
i am a sprint customer and i hate this move.
the android market may be chaotic but there is more freedom for the user.
this is a dangerous move for sprint.
android will only gain in market shares baring any great upset in the current trends.
This is besides the point. Android seems to sell 3-4 phones to each iPhone sale (citation needed) so sprint is cutting itself off from 20ish percent of the market. That's what matters. Quenching the bleeding might be another perspective.
http://www.bgr.com/2011/10/03/sprint-guarantees-to-buy-over-...