Posted By RichC 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 customers — I 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?