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iPhone Actually Costs Sprint Money

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Sprint experienced a $1.3-billion loss in the last quarter of 2011, according to the LA Times. While the entire amount cannot be attributed to the iPhone, experts are saying the carrier took a huge hit when it purchased 1.8 million iPhones for $630 million.

The Times noted that carriers actually take a loss on the purchases of the iPhone, but hope to turn a profit once they lock customers into two-year contracts. However, many in the industry have warned that making a profit on these transactions is more difficult than it seems.

Sprint allegedly spent more than a quarter of its entire equipment costs on these iPhones. That, combined with the fact that the two-year contracts are just barely kicking in, means Sprint has a long way to go before it’ll know whether this bet has paid off.

 

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