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iPhone Not Selling Well for Leap Wireless

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There were a lot of people who were excited when prepaid wireless carrier Leap Wireless, who operates the Cricket Wireless mobile phone brand, announced that it would be offering the iPhone 5. I think a bunch of people forgot that carriers like AT&T and Verizon offer big subsidies to get people to purchase the phones and sign up for new contracts. A network like Cricket Wireless that offers no subsidies requires you to pay for the entire device up front.

iphone image

In the case of Leap Wireless and Cricket Wireless, that meant users needed to pay at least $500 for an iPhone 5. Many of the customers who shop prepaid carriers are looking for no contract and budget phones. It never seemed likely to me that they’d be willing to cough up $500 for a smartphone. It appears I was correct because Leap has announced that it believes it may end up with $100 million worth of unsold iPhones by the middle of 2013.

The company says that it is on pace to sell only half the number of iPhones that it committed to sell during the first year of its Apple contract. That contract is set to end in June and the poor sales comes despite the fact that Apple previously allowed the wireless carrier to sell the iPhone at a reduced price when compared to unlocked iPhones. Leap’s inability to sell the iPhone could make some of the national carriers such as Verizon and AT&T seriously reconsider their plans to reduce any subsidies on smartphones.

[via WSJ]







Comments (1):

  1. Fred Willey says:

    Yea, $500 bucks for a phone is expensive. But it’s more than just the cost of the phone when it comes to a carrier like Cricket. I’m not spending $500 dollars on a phone to put on a subpar network like Cricket. Example, roaming is an “add-on” to your plan with Cricket, it costs extra. Other prepaid providers, depending on who’s network you’re on, you can go all over; it’s automatically included with your plan. Cricket has a bad reputation for quality, dropped calls, can’t connect, the list goes on. If I’m spending $500 iPhone you can believe it’s going on either an AT&T MVNO or possibly a T-Mo MVNO. Not Cricket, that’s if I want to be able to use all the features the phone has to offer.

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