Leap Wireless Might Purchase Its Own Stocks Due to iPhone5’s Low Sales

Sara Cunningham March 8, 2013 0

As iPhone5 is one of the world’s leading companies in technology, it is only second to Samsung. Its demand is getting lower and some of its partners can’t hit half of its target sales. For Cricket Wireless, the handset is not that in demand and does not interest the customers anymore, not like before. The wireless company is selling the phone for $500 without any contract from Apple. This means, the company does not need to hit any target in sales. This is good news since there are a lot of new mobile devices coming in stores soon after the Mobile World Congress.

In the meantime, Leap Wireless might be having a hard time in sales this year. Due to Apple’s decreased demand, the wireless company might even purchase unsold units. The company signed a contract with Apple for three years thinking that the iPhone5 will still be in demand in the coming years. It is estimated that the unsold handset will reach up to $100 million worth before the summer season starts. But before this fail, the company expected that it will sell at least more than half of its stocks on hold. After Leap signed a three year contract with Apple Inc., Cricket Wireless at the same time, unexpectedly sold the same phones. The good thing is Cricket did not sign any agreement with the mobile company.

Leap Wireless Might Purchase Its Own Stocks Due to iPhone5’s Low Sales

Leap has concluded that if the sales for iPhone5 continue to be rough, they will have to purchase unsold units. Leap will have to pay $100 million of more phones in the middle of this year. If the same situation goes, it would have to be another $150 million in the middle of 2014. Since it’s a three year contract and same flow goes, it will have to be $200 million in the middle of 2015. Leap at the same time limits the network access which could be one of the reasons for its poor sales. Also, if Apple will release AWS compatible device, maybe different types of market will be able to purchase the product. If not, Leap mentioned looking for the service elsewhere. It could be possible for Leap to decrease the phone’s price but its COO is positive that it will still hit the target and fulfill its commitment with Apple.

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