February 9, 2012- The iPhone has been a success for Sprint but the Apple handset has not yet been able to turn a profit for the business. Sprint Nextel, the 3rd largest cell phone carrier in the nation, reported on Wednesday a net loss of $1.3 billion for the fourth quarter. Revenue was $8.7 billion, up 5%.
The loss totaled $0.35 per share excluding charges. Analysts estimated a loss of $0.38 per share. The earnings of Sprint illustrate Apple’s iPhone impact. The fourth quarter of 2011 was the first quarter the company sold Apple’s handset, which has been very successful for rivals Verizon and AT&T. Sprint announced it sold over 1.8 million iPhones during that period.
However, the iPhone created a negative impact on the balance sheet for the company due to the cost of subsides and equipment for the handset. Apple previously announced it sold more than 37 million iPhones during the same quarter. AT&T sold nearly 7.6 million, while Verizon sold close to 4.2 million units. Those figures mean that over 37% of the sales for iPhones were in the U.S.
For Sprint, the iPhone is a crucial element in its battle to win new subscribers. While smartphone sales have skyrocketed, new subscribers are shrinking since such a large number of people already own cell phones. Sprint’s sales strategy includes an unlimited data plan for users, which both Verizon and AT&T no longer have. It seems to have worked as over 1.6 million subscribers signed on in the last quarter of 2011.