While the iPhone remains an insanely popular smartphone choice among the three major carriers in the United States — AT&T, Verizon Wireless, and Sprint — the handset has been a disappointment for Leap Wireless, which operates prepaid carrier Cricket Wireless.
Cricket Wireless took a bet on the iPhone when it reached a yearlong agreement with Apple last June, but it has been unable to sell the handset at a quick enough pace. As a result, the smaller carrier could have upwards of $100 million worth of unsold iPhone stock by the middle of this year.
This is bad news for both Leap and Apple. For Leap, the company will be in the hole for around $100 million worth of unsold iPhones, according to the Wall Street Journal; and it doesn’t bode well for Apple either, as the company partners with prepaid carriers in an effort to lure more lower-income users.
The incentive to purchase an iPhone through Cricket Wireless is that, although you pay a higher price for the handset upfront, the amount owed each month throughout the duration of the contract is typically lower than what most major carriers charge.
There are a myriad of reasons as to why iPhone sales could be sluggish for Cricket Wireless. First and foremost, the carrier has only 5.3 million subscribers and limited network access compared to its larger competitors. Additionally, competition from Android devices remains strong.
In an effort to lure more customers, Cricket Wireless will work on increased marketing and provide potential buyers with additional financing options when purchasing an iPhone. But, ultimately, the smaller carrier has a steep uphill battle ahead.