Leap Wireless, known by many as the owner of Cricket, has not been happy with Apple Inc. (NASDAQ:AAPL) iPhone sales. In fact, it was recently revealed in a filing with the U.S. Securities and Exchange Commission that Cricket only expects to purchase 50 percent of the iPhone smartphones it committed to during the first year of its agreement with the Cupertino-based company.
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BGR.com first reported the news, and it is interesting to see that Leap Wireless is struggling where other carriers, such as AT&T and Verizon, have excelled. Is there a reason for this?
Here is what the report by BGR had to say:
“The carrier revealed that it is on pace to purchase only half of its first-year commitment from Apple through June 2013. The information in the filing contradicts earlier statements made by the company’s chief financial officers Jerry Elliot. The executive previously said that “sales of Apple devices were pretty good in the fourth quarter” and the carrier wasn’t concerned about meeting its commitment with Apple.”
As you can see, something went wrong along the way. One way or the next, this is not good news for either Leap Wireless or Apple Inc. (NASDAQ:AAPL).
What does this mean to the people of Leap Wireless? Will they owe Apple a lot of money? The same article goes on to explain that this could definitely be the case:
“As noted by BTIG Research analyst Walter Piecyk, Leap could now be on the hook for $100 million of additional iPhone purchases in 2013 and $450 million over the course of its three-year contract.”
As you can see, it is Leap Wireless that is in the bad spot right now. While Apple Inc. (NASDAQ:AAPL) is surely disappointed with the fact that the company is not buying more smartphones, the fact remains that Leap is on the hook and this could cost the carrier hundreds of millions of dollars in the years to come.
Do you have any opinion on why Leap Wireless has been unable to move more Apple Inc. (NASDAQ:AAPL) iPhones? Be sure to share your opinion in the comment section below.
DISCLOSURE: I have no positions in any stock mentioned.
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