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Leap Could be Left With $100 Million in Unsold iPhones

By - Source: WSJ | B 21 comments

Prepaid mobile carrier has around 5.3 million subscribers.

U.S. prepaid carrier Leap Wireless could be left with as much as $100 million worth of unsold iPhone units.

The firm, which operates Cricket Wireless, told the Wall Street Journal that it's considerably behind in its prepaid iPhone sales. When it completes its year-long contract with Apple in June, it's likely to have sold half of the iPhone units it committed to selling.

Apple partners with prepaid carriers in an effort to attract more lower-income consumers. Leap currently has around 5.3 million subscribers but is affected by the fact that it has less network access than America's major carriers.

With Leap's no-contract plan, consumers pay nearly full price for the iPhone but are then charged a lower amount for monthly payments when compared to carriers that require two-year contracts. By paying Apple a small subsidy, Leap offers the iPhone 5 for $500, which is around $150 less than buying the smartphone from Apple itself.

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  • 20 Hide
    slomo4sho , March 4, 2013 4:16 PM
    $500 for an iPhone 5 or $350 for a Nexus 4...Which is the better buy? I guess some people will still pay a premium for inferior hardware and a brand name.
Other Comments
  • 6 Hide
    Jim_L9 , March 4, 2013 4:03 PM
    Ouch!
  • 20 Hide
    slomo4sho , March 4, 2013 4:16 PM
    $500 for an iPhone 5 or $350 for a Nexus 4...Which is the better buy? I guess some people will still pay a premium for inferior hardware and a brand name.
  • -7 Hide
    goodguy713 , March 4, 2013 4:36 PM
    Virgin mobile offers the iphone 5 as well but i think its a bit cheaper .. how ever 500 for any phone is to much if you ask me.. personally i think the most i would pay for a phone would be around the 250 to 300 mark any more then that would be a waist considering your looking at upgrading it in 1 to 3 years time.. phones just are not that important especially when most modern phones like HTC EVO 4g 3d can handle most if not all of the functions .. and performs well at around 250 you cant go wrong.. what what point do faster processors and gimics really add any value to phones? other then a name and a marketing scheme ?
  • 5 Hide
    mobrocket , March 4, 2013 4:48 PM
    EBAY is a good market too for a phone

    no matter what thou, if u go with a major carrier u will get screwed up the A
  • 5 Hide
    velocityg4 , March 4, 2013 5:04 PM
    slomo4sho$500 for an iPhone 5 or $350 for a Nexus 4...Which is the better buy? I guess some people will still pay a premium for inferior hardware and a brand name.


    The best price I could find for that phone is $450 unlocked. While I do agree the iPhone is overpriced. A lot of people don't care about specs. It's about will it do what they want it to do and how easy is it. As an onsite computer technician. I can say for certain that most non tech savvy people find the iPhone much easier to use. Which is a huge selling point.

    The other problem Android being the fragmentation. You get a new phone from another maker and it is different. A lot of people don't like change they get frustrated because they don't understand what programs are and get frustrated when things look and act different. These people just memorize what to push to get the result they want. With a new iPhone they get that. The new one is just faster than their old one.

    Now this company screwed up big time. People going with some tiny regional carrier because they are penny pinching are not going to spend $500+ on a new phone. If they get an iPhone they are much more likely to bring a used iPhone they got off eBay or Craigslist. More likely they are going to get an Android or Windows Phone they can pick up for $100 to $150. Probably the Android because when people think Windows they think viruses and crashing.
  • 4 Hide
    scrumworks , March 4, 2013 5:04 PM
    Selling iphones is good business only for Apple. I still wonder why people care about those outdated iphones that are so fragile and packs no innovations.
  • 8 Hide
    digiex , March 4, 2013 5:59 PM
    Sell them to the Chinese.
  • 3 Hide
    Osmin , March 4, 2013 6:05 PM
    Does it make sense for a company that goes after the price conscious consumer to get into a large volume contract for one of the most expensive phones on the market? Some business decisions take time to bear fruit or do not fit well with their business model. I believe it’s a case of the latter. I have a Galaxy Note 2 and an iPhone 5. I have a better experience with my iPhone 5 than my Samsung Galaxy Note 2. I prefer looking at the larger screen on the Samsung but the iPhone 5 not only fits better in my pocket but also is easier to use. People like to trash talk the iPhone 5 but it’s like saying I hate expensive BMW Sports Cars because the Chevrolet Corvette is faster and cheaper. My parents, who have experience with both devices, find the iOS experience easier. You don’t have to first read if the app is compatible with your phone before you download and there are no options or return buttons on the bottom of the phone to add complexity. The apps are not always consistent with the look and feel and they must learn the quirks of when to use the option button or tabs. They don’t have to install other stores like the Amazon store app to get the free app of the day, and they don’t have to think about the SD card to store and retrieve information. They find the Android OS a little uglier to look at with the pale looking icons. These are just opinions and I don’t blame them or anyone else that can afford to buy the iPhone because they prefer the experience. They are not iSheep but prefer an easier experience because they are not technically savvy and do not like reading manuals. Just get the phone you like or can afford because the majority of the world cannot afford the Apple experience.
  • 2 Hide
    COLGeek , March 4, 2013 6:07 PM
    Unlock and sell them on eBay? Just a thought.
  • 2 Hide
    madjimms , March 4, 2013 6:56 PM
    Send them into the sun.
  • 1 Hide
    f-14 , March 4, 2013 8:58 PM
    if they could swing carrier service on the prepaid side of things in mexico central america and south america they'd sell out by the end of the week.
  • 1 Hide
    dalethepcman , March 4, 2013 11:45 PM
    Osmin...... My parents, who have experience with both devices, find the iOS experience easier. ...... Just get the phone you like or can afford because the majority of the world cannot afford the Apple experience.

    I didn't want to re-quote your whole run-on paragraph, but you stated these as if they were fact's when they are not, then followed it up with "this is just their opinion." The only "Opinion's" you stated, was "They find the Android OS a little uglier to look at, and they find iOS easier."

    Android users also,
    "don’t have to first read if the app is compatible with your phone" (the store will not display applications to you if your device is incompatible)

    "don’t have to install other stores like the Amazon store app to get the free app of the day" (android works just fine without the Amazon store, and only advanced users should allow 3rd party installs)

    "don’t have to think about the SD card to store and retrieve information" (Most models come with 8-32 GB built in, but even with 4GB I have never run out of space for apps and phone functionality)

    In addition,
    there are menu and backk buttons on the bottom of the phone to add usability (how does a "back" button confuse anyone? Back always goes to the screen you were on before the current one...)

    There are add on storage slots for increasing the phones storage for a portion of what "built in" storage costs.

    There is one thing I agree with you on though. " Just get the phone you like or can afford"
  • -3 Hide
    feeblepenguin , March 5, 2013 5:28 AM
    Quote: "Apple partners with prepaid carriers in an effort to attract more lower-income consumers."

    Dear Tom: that's not a sentence.
  • 3 Hide
    sublime2k , March 5, 2013 6:48 AM
    feeblepenguinQuote: "Apple partners with prepaid carriers in an effort to attract more lower-income consumers."Dear Tom: that's not a sentence.

    Partners is a verb in this case.
  • 1 Hide
    spentshells , March 5, 2013 3:04 PM
    sublime2kPartners is a verb in this case.


    10/10
  • 0 Hide
    mnatives , March 7, 2013 6:13 AM
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  • 0 Hide
    compa008 , May 23, 2013 2:27 PM
    Tbh, I've owned an android for my last two phones, but I'm not going to say that buying Apple is paying a premium for inferior hardware....that is just blatantly false. It has better hardware and better apps, but at a premium. Don't believe me? Look below:
    http://www.iphonebenchmark.net/passmark_chart.html
    http://www.androidbenchmark.net/passmark_chart.html
    The old iphone 5 still beats the brand new Samsung Galaxy S4 (and that's the decked out S4 losing).
    However, if one looks at the price per performance then android takes the cake.
  • 0 Hide
    spentshells , May 24, 2013 9:23 AM
    Quote:
    Tbh, I've owned an android for my last two phones, but I'm not going to say that buying Apple is paying a premium for inferior hardware....that is just blatantly false. It has better hardware and better apps, but at a premium. Don't believe me? Look below:
    http://www.iphonebenchmark.net/passmark_chart.html
    http://www.androidbenchmark.net/passmark_chart.html
    The old iphone 5 still beats the brand new Samsung Galaxy S4 (and that's the decked out S4 losing).
    However, if one looks at the price per performance then android takes the cake.


    two completely different benchmarks for 2 completely different phones I like what you did there, stating unrelated nonsense as fact of something the benchmarks do not show that really is commendable.

    apple is good too but Im not sure where you are going with this.
  • 0 Hide
    ingtar33 , June 23, 2013 10:24 PM
    so... cricket, who's market is low income no credit customers, thought it was a good idea to sell iphones for $500 and is surprised to have $100,000,000 of them laying around? That's like 200,000 of them. 200k! they actually thought they'd sell 200k iphones to low income and no credit customers?

    wow... for a company working with a low income market they have absolutely no idea who their customer are do they?
  • 0 Hide
    chainsaw667 , September 28, 2013 10:04 PM
    2000 phones, not 200k.
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