Leap Wireless Stuck With iPhone Stockpile
Leap Wireless said it may only sell half as many iPhones as promised in its contract with Apple.
The Cricket Wireless company told the Wall Street Journal that the slow sales could leave it with as much as $100 million worth of unsold iPhones by the middle of this year when the first year of its contract ends.
When Cricket launched the iPhone 4 and 4S last year, it became the first prepaid U.S. carrier to offer Apple’s flagship smartphone. At the time, CEO Doug Hutcheson called the move a “major step forward” in setting his company apart.
Last month, Leap reported it had lost 337,000 subscribers in the fourth quarter of 2012. Even though its revenue for the quarter just fell short of analyst estimates and its EPS beat the street, Leap’s stock still fell more than 7 percent.
The company also announced that it had resolved a wholesale dispute with Sprint and that it had entered into a new nationwide LTE roaming agreement with an unnamed carrier.
As of 9:50 a.m. CT, Leap’s stock is down 2.5 percent.