3 reasons why the iPhone won't help Sprint very much

Sprint still must confront AT&T-T-Mobile deal, need to convert to LTE, and win new customers

It might sound like a major win for Sprint to begin selling the iPhone for the first time in mid-October, but veteran industry analysts say it won't help Sprint all that much.

Sprint will get the iPhone 5 in mid-October, at the same time that its bigger competitors, AT&T and Verizon Wireless, get the iPhone 5, according to unnamed sources cited in the Wall Street Journal. Both AT&T and Verizon already sell versions of the iPhone.

Sprint won't comment officially on selling the iPhone and Apple won't comment on when the next-generation iPhone will launch, or with which carriers. Even so, a next-generation iPhone is widely expected to surface in coming weeks, one with an improved operating system and a better camera.

Sprint is the only major U.S. carrier to offer unlimited data plans and frequently notes that its total costs for owning a smartphone are $20 to $30 less than its larger competitors.

Some experts regard Sprint's ability to finally offer an iPhone as a major win for the third-largest U.S. carrier, other disagree. Here are three reasons why selling the iPhone won't help Sprint all that much:

1. Sprint unlikely to win many new customers

"The iPhone is a great device and it will let Sprint hang on to some customers who would otherwise leave [the carrier], but I don't think many customers will move to Sprint because of the iPhone," said Jeff Kagan, an independent technology analyst, in an email. "While definitely good news, I don't see this [sale of the iPhone] shaking the timbers at Sprint."

Added Jack Gold, an analyst for J. Gold Associates: "Unless Sprint has a major price advantage, including really low-cost data plans or some other sales gimmick like free phones, Sprint might not gain all that [many new customers] since many people consider Sprint to be the least desirable carrier from a coverage perspective."

Gold said that while some Sprint customers "would like to get their hands on the iPhone," thus helping sales, the phone is unlikely to make as much of an improvement for Sprint as it did when Verizon got the iPhone 4 in February. (In 2007, AT&T got the original iPhone, exclusively, which helped improve AT&T sales.)

"The iPhone is now becoming a commodity, since it is soon to be available on all carriers," Gold said via email. "So customers will not only choose a phone, in this case the iPhone, but also the carrier they want to work with."

At best, added Gartner analyst Ken Dulaney via email, Sprint's iPhone "probably keeps some customers from bleeding to other networks."

On the contrary, the conventional wisdom shared by a few Wall Street analysts is that Sprint will see customers upgrade to the iPhone, which could draw them inside Sprint stores to buy iPhone accessories, which command high profit margins.

2. Deal could boost AT&T acquisition of T-Mobile

Sprint will look stronger to federal regulators with sales of the iPhone, which will have some effect in improving AT&T's chances of winning regulatory approval of its $39 billion purchase of T-Mobile USA.

This reason depends entirely on how regulators view competition and the importance of iPhone sales to a carrier. The Federal Communications Commission has repeatedly expressed concerns about exclusive deals that carriers strike with manufacturers to sell devices, as AT&T had with Apple for years with the iPhone. By stretching the number of carriers offering the iPhone to include Sprint, some legal and regulatory experts believe a combined AT&T-T-Mobile -- massive as that would be -- would be less of a threat to Sprint.

Sprint has aggressively fought the proposed AT&T-T-Mobile merger, and would likely oppose any notion that helps that merger, short of not selling the iPhone, analysts noted.

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