Sprint gets a bite at the Apple

A customer looks at the new white iPhone 4 at the Apple store April 28, 2011 in Palo Alto, Calif.

BOB MOON: Seems nobody can't keep a secret like Apple. So, it came as little surprise today, when the Wall Street Journal reported the tantalizing news
that Apple's new iPhone 5 will be available from Sprint, starting in October. And none of the companies in on the deal would comment because it's... yeah, a secret. The iPhone could make it easier for Sprint to compete with its bigger rivals AT&T and Verizon, which already sell Apple's products. Or it could just make the number-three wireless carrier a more distant third.

Marketplace's Mitchell Hartman explains.


MITCHELL HARTMAN: Here's what the cell-phone market looks like now: Verizon's number one and it has the iPhone. AT&T is close behind. It was the first with the iPhone. Then there's Sprint-Nextel, struggling in third place -- no iPhone. Until now.

MARK OSTRAU: Sprint's access to the iPhone is going to make Sprint a more formidable competitor than it was before.

That's Mark Ostrau, an antitrust lawyer at Silicon Valley firm Fenwick & West. He says Sprint's access to the iPhone may end up making AT&T a more formidable competitor, too. AT&T is trying to buy T-Mobile, and antitrust regulators are scrutinizing the deal to make sure it doesn't give AT&T too much market power.

Todd Rosenbluth follows telecom at Standard & Poor's.

TODD ROSENBLUTH: A stronger Sprint-Nextel is beneficial to AT&T's argument that there's lots of competition in the marketplace and it's a level playing field for all of the companies that are out there.

The spread of smartphones like the iPhone to more carriers signals a change for consumers, says Brad Thomas at KeyBanc Capital Markets. Remember when you used to sign up for a cellphone plan and a free, cheap phone was part of the deal?

BRAD THOMAS: With the advent of the iPhone, and some of the BlackBerry products and some of the Android products, we've re-entered a phase where the consumer is willing to spend hundreds of dollars on a premium phone.

Analysts say increasingly, consumers won't pick their carriers based on which phones are offered, but on where they can get the best monthly deal.

I'm Mitchell Hartman for Marketplace.

About the author

Mitchell Hartman is the senior reporter for Marketplace’s Entrepreneurship Desk and also covers employment.

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