Five Reasons Apple Should Buy Sprint
Monday, April 6, 2009 at 8:53AM Each month we take a look at Apple fantasy mergers: Mergers intended to be funny, or sometimes serious, but almost always unlikely to happen. Today though, it's a merger/acquisition that would actually make a lot of sense: Sprint. Sprint? Here's Five reasons why this makes sense:
1. Apple would control the whole "widget." What does Apple like above all else? Control over how their products are marketed and viewed. What better way to do that with the iPhone and future devices than to own the network too. The cell phone service provider space could use the same kind of shakeup the iPhone brought to the hardware manufacturers.
2. It's a bargain. Relative to the other networks, Sprint would represent a decent buy. And while their coverage might be lacking in current generations, the 4G space looks like it could be a different story.
3. Revenue, revenue, revenue. Sure, the $300 subsidy from AT&T on each phone is nice, but how about the net revenue from every U.S. customer over the course of their contract? It remains to be seen how becoming a U.S. provider could affect relationships with carriers in other parts of the world.
4. A rising tide lifts all ships. Imagine the new opportunities across Apple's products, from MobileMe to MacBooks if Apple could integrate wireless service into more devices, and use a networked streamlined for data rather than voice.
5. Make AT&T call your bluff. Admittedly, this one doesn't require buying Sprint, but merely talking about it. If Apple let it be known that they weren't afraid to go into the cell provider business themselves, maybe AT&T would make more attractive concessions not just for Apple, but also iPhone customers. Things like last week's contract wording "mistake" could be a thing of the past.
Apple, Fantasy Merger, Sprint, merger Permalink
Reader Comments (12)
Sprint is a mismanaged poorly run company. It has a lot of disgruntled employees - especially right now. Apple is not known for buying big companies. Apple culture is quite different and they need to protect it and not dilute it. This is exactly why they buy strategic small companies. During their hiring boom, Apple had issues with some of the employees because they did not fit in.
I think Apple should not buy ANY large company. Itwill be its downfall.
Apple's success in recent years has been all about focus. The likelihood they want to buy a large messy company is near zero.
I agree Apple has traditionally made small, strategic acquisitions. At the same time, I've got to think that in a perfect world, they would want to control the experience of the network/carrier of their devices as well. It would be prohibitively expensive to start from scratch, so picking up an established network on the cheap might make sense. Although an Apple that was also a cell phone network would be a vastly different Apple than we know today.
1) iPhone is a GSM phone. Sprint uses CDMA.
2) You think a lot of people complain about ATT's coverage, if the iPhone was on Sprint, complaints would skyrocket about coverage. Sprint has the weakest coverage of the 4 big carriers.
3) Sprint is a mismanaged, unfocused, money losing company.
4) Apple would need to spend hundreds of millions of dollars to get Sprint coverage close to what ATT currently has. Also, did would take many many years.
5) Sprint would lose support from other phone manufacturers and probably become a 1 trick pony.
6) In the USA, Apple would be competing directly with it's partner, ATT, for wireless customers. Not a good idea to compete against your allies. Good way to lose them.
@windozed:
1) True, but there are rumored CDMA prototypes. It's a good point that GSM makes more sense in an iPhone designed for global roaming.
2)The hope would be that Sprint's next network would prove far better than its current network. I stress hope.
3)Agreed.
4)Agreed.
5) I think Sprint would cease to exist, and their towers would simply become Apple, and perhaps be used exclusively for Apple devices. Whether that would hold up in court, is another matter.
6)Just to clarify, this would all have to happen post- AT&T agreement.
A few more comments and I'll be convinced this isn't such a good idea. The CDMA/GSM issue is probably the biggest stumbling block to this being feasible. Although that might all go out the window with 4G/LTE cell service.
7) Lastly, why re-engineer the iPhone for CDMA, basically used by Sprint and Verizon in the US only? Pretty much all International wireless carriers use GSM. Apple can make 1 GSM model and tweak it for pretty much all International wireless carriers. Also, tweak it for ATT in the US. If Apple didn't give ATT exclusive distribution rights in the US, they could tweak it to be sold by Tmobile also.
Don't forget that Apple already makes a non-GSM version of their iPhone for Japan. The Japanese iPhone uses a type of CDMA though not identical to the one used by Sprint or Verizon is very similar.
I think it's more important for Apple to somehow get the iPhone on other carries, rather than become a carrier.
Apple has steadfastly stayed lean and mean, ignoring the pundits that try to find silly ways to spend their cash. Because of this the current recession will provide only a hiccup to the company, and they will likely steal market share from poorer run companies. Apple doesn't want or need the baggage that is Sprint.
This was a good read, mostly for the comments. Thought out opinions and points against Apple buying Sprint that didn't slam the idea just because it would seem to suit Apple's character of controlling every aspect of their products.
The idea of Apple jumping into the "carrier wars" reminds me of the mid 90's when Apple briefly had it's own internet service "eWorld". Not that it was a bad idea, it just wasn't worth the energy & expense especially when the ISP darling at the time was AOL. At that time AOL's deal was hard to beat. Which brings back point (7). Why beat them when you can join them. Apple can tailor the iPhone to any network with GSM and not have to deal with the business headaches of running, upgrading and updating the cell network. Thanks for the read.
@RB,
I agree with you, but the interesting thing is, wouldn't we all have said the same thing about Apple stores in the late 90's? "Why would Apple want to deal with the headaches of building, staffing, updating standalone stores? Sears has already done the hard work."
Again, not disagreeing, but I definitely see similarities in the two situations.
Heres another thought: A Google Apple alliance with Google responsible for the acquired Sprint network? Why wouldnt they do that with all those mobile datacenters? In the time frame for this to happen, the iPhone 3.5 -4.0 transitions to LTE or WiMax and the network itself can be exclusive to OSx based and Android based phones. :)