Sprint Gets Right to Offer Apple’s IPhone in Battle With AT&T, Verizon
Sprint Nextel Corp. (S), the third-
largest U.S. wireless operator, struck a deal to offer Apple
Inc. (AAPL)’s latest iPhone, joining rivals ATT Inc. (T) and Verizon
Wireless in selling the device.
Sprint will begin selling the iPhone 4S on Oct. 14 along
with its competitors. The iPhone 4S uses two antennas to improve
call quality and a processor that is seven times faster than the
chip in the previous phone, Apple said today at a press
conference at its headquarters in Cupertino, California.
“They have been at a competitive disadvantage and this
puts them on a level playing field with ATT and Verizon,” said
Michael Nelson, an analyst with Mizuho Securities USA Inc.
“They will benefit from improved retention of their customers
and a high level of customer upgrades.”
Sprint has been struggling to compete against Verizon
Wireless and ATT, the two largest U.S. wireless operators,
which both already offer the Apple device. The Overland Park,
Kansas-based company has lost money for 15 consecutive quarters
and in July reported a decline in contract customers that was
larger than some analysts had estimated. Lack of the iPhone has
been the top reason customers choose other carriers, Chief
Executive Officer Dan Hesse told investors last month.
Verizon Wireless, which is majority owned by Verizon
Communications Inc. (VZ), added the iPhone in February after almost
four years of ATT exclusivity. In the second quarter, the first
full quarter with two iPhone carriers, ATT activated 3.6
million of the devices, while Verizon, the largest wireless
carrier, activated 2.3 million.
Boost Sales
Sprint gained 13 cents, or 4.8 percent, to $2.86 at 4 p.m.
in New York Stock Exchange trading. The stock has dropped 32
percent this year.
Sprint may add 214,000 new contract subscribers this year
with the iPhone, compared with 855,000 customers it lost last
year, said John Hodulik, an analyst with UBS AG, who rates the
shares “neutral.” Hodulik estimates Sprint will sell 1.2
million iPhones in the fourth quarter, with about 25 percent of
those coming from other carriers.
Sprint will offer the phone with unlimited data service and
plans to distinguish itself from ATT and Verizon Wireless,
people familiar with the matter said last month. That could draw
customers away from the other carriers, said Todd Rethemeier, an
analyst at Hudson Square Research in New York.
Sprint already offers unlimited data plans for smartphones
such as Research In Motion Ltd. (RIMM)’s BlackBerry and HTC Corp. (2498)’s
Evo, which runs on Google Inc. (GOOG)’s Android operating system.
To contact the reporter on this story:
Sarah Frier in New York at
sfrier1@bloomberg.net;
Scott Moritz in New York at
Smoritz6@bloomberg.net
To contact the editor responsible for this story:
Peter Elstrom at pelstrom@bloomberg.net
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Article source: http://www.bloomberg.com/news/2011-10-04/sprint-gets-right-to-offer-latest-iphone-in-competition-with-at-t-verizon.html
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