Leap Wireless owns Cricket, a small prepaid carrier in the U.S. that recently started selling the iPhone. In fact, Leap was the first pay-as-you-go carrier in the U.S. to start selling the iPhone at full price. Now other prepaid carriers like Virgin Mobile have also picked up Apple’s handset.
In recent months, Leap hasn’t been very thrilled about how many iPhones it’s selling.
According to The Wall Street Journal:
Leap Wireless International Inc., which operates the Cricket cellphone brand, said it is on pace to sell half as many iPhones as it committed to sell during the first year of its contract with Apple Inc., which ends in June.
As a result, Leap said, it could end up with $100 million worth of unsold iPhones by the middle of this year. That spells more trouble for Leap, a company struggling to keep pace with larger competitors, and sheds light on the challenges facing Apple in cracking the huge market for smartphones being bought by lower-income consumers.
The report goes on to mention that Leap has only 5.3 million subscribers, and that the carrier can’t sell the iPhone in many parts of the country due to technical limitations.
While big carriers like AT&T and Verizon sell a new iPhone subsidized for $200 with a two-year contract, Leap sells the iPhone unsubsidized at $500. Leap in turn charges less for a monthly plan and doesn’t lock subscribers into a two-year commitment.
A carrier I’ve never heard of is having a hard time selling the iPhone. Definitely the iPhone’s fault
— Buster Heine (@BST3R) February 28, 2013
The Journal doesn’t give an exact number for how many iPhones Leap committed to sell during its first year. Many U.S. customers don’t want to pay $500+ for a new iPhone that can’t even be used in most of the country, so that’s going to severely limit Leap’s reach.
Apple is rumored to be working on a cheaper iPhone that would sell at a much lower price point unsubsidized. Until then, Leap probably won’t be selling a lot of iPhones.
- Source The Wall Street Journal