WESTCHESTER COUNTY, N.Y. (TheStreet) -- With its decision to take an initial loss for the privilege of selling Apple's (AAPL) - Get Report iPhone, Sprint (S) - Get Report is larding debt upon debt. The problem, of course, is that until yesterday Sprint was playing coy about how much the iPhone deal would cost.
Considering the cumbersome nature of Sprint's existing debt, this is an essential issue. But--somewhat unbelievably--in an article on Sprint's earnings, which were released yesterday, The Financial Times waited until the second to last paragraph to mention iPhone costs.
failed to mention it altogether.
Even those who mention the iPhone cost issue miss an element that
is right to highlight in a headline: "Can Sprint Sell 25 Million iPhones Over 4 Years?" Sprint's full arrangement with Apple, Barron's posits by referring to an analysts' report, relies on selling 25-30 million iPhones over 4 years.
Even the articles that deign to mention how much Sprint is ladling out for the iPhone assume, in the end, best-case-scenario, without giving a sense of just how much Sprint will have to sell to get the full-benefit of the iPhone.
Look: considering its debt level, this issue is center to Sprint's future viability. Sprint covers a chunk of upfront iPhone costs for its consumers in order to hopefully make that up--and more--on service revenue. At a recent analyst meeting, Sprint proved so brazenly silent on the issue that the crowd alternated between anger and laughter. Now we know cost--but we won't know potential benefit until we calculate, and track, just how many iPhones Sprint sells.
At the time of publication, Fuchs had no positions in any of the stocks mentioned in this column.
Marek Fuchs was a stockbroker for Shearson Lehman Brothers and a money manager before becoming a journalist who wrote The New York Times' "County Lines" column for six years. He also did back-up beat coverage of The New York Knicks for the paper's Sports section for two seasons and covered other professional and collegiate sports. He has contributed frequently to many of the Times' other sections, including National, Metro, Escapes, Style, Real Estate, Arts & Leisure, Travel, Money & Business, Circuits and the Op-Ed Page.
For his "Business Press Maven" column on how business and finance are covered by the media, Fuchs was named best business journalist critic in the nation by the Talking Biz website at The University of North Carolina School of Journalism and Mass Communication. Fuchs is a frequent speaker on the business media, in venues ranging from National Public Radio to the annual conference of the Society of American Business Editors and Writers.
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