Sprint still betting the farm on the iPhone

Despite the fact that subsidising the iPhone appears to be killing its business, Sprint is continuing to bet the farm on Apple.

According to the Wall Street Journal, while shareholders are starting to get very concerned about the company’s debt and general well being, Sprint managers have been getting the company even deeper into its abusive relationship with Apple.

Reportedly it has committed itself to buy 30.5 million iPhones over the next four years, a deal worth around $20 billion.

Such a deal will only work if the iPhone attracts more subscribers to Sprint’s network but if it can’t sell all of the phones it runs the risk of going bankrupt.

This is because Sprint is paying $500 for each iPhone so that it can offer them at the “low” prices consumers expect. Even if iPhone users adopt the expensive subscription plans that iPhone users adopt, it will take ages for Sprint to see its money back.

Boy Genius Report says that the $20 billion deal might have landed Sprint an exclusive with the iPhone 5. It might be that Sprint will be the only carrier to get the iPhone 5 when it is announced, while both Verizon and AT&T will get slightly souped-up iPhone 4S models and only get the iPhone 5 later. That will help Sprint clean up on its iPhone investment, but it may still not pull the company’s nadgers out of the fire.