Earlier this morning, mobile phone carrier Sprint released its 10-K filing with the SEC for the fiscal year ending in December. In the filing, it revealed that it had made a commitment with Apple to purchase a minimum number of iPhones from Apple amounting to $15.5B in outlay.
Because the subsidy of the iPhone 4S is significantly larger than the other phones that Sprint carries, it is predicting that its wireless earnings will actually decline in 2012 until it starts reaping benefits from the fees associated with its expected influx of new customers.
Horace Dediu of Asymco makes a good case that each iPhone can be estimated at somewhere around a $630 ARPU when sold to a carrier like Sprint. This would indicate that Sprint’s commitment is somewhere around 23.8 million iPhones.
Sprint previously said that it needed to buy some 30.5 million iPhones over the next few years in order to stay competitive with rival carriers. The fact is that the iPhone is driving customer adoption in a huge way. T-Mobile even attributed its recent financial troubles directly to it not carrying the device, mentioning the iPhone 4S no less than 6 times in its fourth quarter 2011 earnings report.
The carrier is still on track to purchase that many, claiming in its report that it expects its purchases of iPhones over the next four years to exceed the $15.5B amount quoted.