Will Apple rescue an ailing Sprint?

Posted By on January 31, 2012

After hearing an employee at Sprint talking about the iPhones  substantial impact on activations last week, I pondered the value of the carrier to Apple. With Sprint buying 30.5 million iPhones worth $20B to the cash rich Apple (AAPL) and the Sprint (S) trading at uncomfortable lows, there are rumors that Sprint needs to return to the capital market in order to continue to operate.  To remain competitive, Sprint has to continue building out their next generation 4G network and has to maintain and grow  customersI wondered, could there be reason for Apple to make an investment in Sprint?

It is one thing to negotiate lucrative deals that benefit Apple, but squeezing a company out of business is not be in their best interest. Both companies benefit if Sprint moves forward with their 4G, therefore  an Apple investment in Sprint may pay off … doubly. First they would benefit as a capital investor if Sprint gets stronger (S today at $2.12) … and second keeping  Sprint as a billion dollar buyer of their hardware bring in more profit than if their were fewer buyers … not to mention keeping Sprint solvent so they can pay for current orders.  Hmm … maybe I’ll pick up a few shares of Sprint?

Comments

  • Ok … for the record, I did buy quite a bit of Sprint, but with a 5%+ run up on Wednesday afternoon I couldn’t resist selling this less than reliable gainer. Next time I’ll buy call options so as not to jump out so quick (who knows, I may kick myself tomorrow?)

Desultory - des-uhl-tawr-ee, -tohr-ee

  1. lacking in consistency, constancy, or visible order, disconnected; fitful: desultory conversation.
  2. digressing from or unconnected with the main subject; random: a desultory remark.