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Technology / Software

Verizon may owe Apple about $14bn for weak iPhone sales

A report from Moffett Research has revealed that Verizon Wireless might owe Apple about $14bn (£9.3m) if the company fails to meet purchase commitments it made in 2010.

As per the agreement signed with Apple in 2010, Verizon must sell $23.5bn worth of iPhones in 2013, more than double when compared to the sales it made last year.

Craig Moffett of Moffet Research was quoted by Bloomberg saying that, "It is likely that Apple would be reluctant to simply ignore these commitments, since many other carriers around the world are probably in a similar situation, and a simple amnesty would set an unwanted precedent."

"It is therefore unrealistic to think that Apple won’t extract some consideration for renegotiating these shortfalls," Moffett said.

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Moffett said in his blog post that few if any other handset suppliers require purchase commitments of this kind, and, again, it is noteworthy that the total commitment was almost zero until Verizon contracted with Apple for the iPhone for the first time.

Verizon and Apple had collaborated in 2011 to provide iPhone 4 on the Verizon Wireless network.

Apple’s iPhones sales increased to 37.4 million units during the second quarter of 2013, compared to 35.1 million units in the year-ago quarter.

Earlier this month, it was revealed that Apple is planning to launch its updated iPhone model in summer 2013, which is anticipated to look similar to the current iPhone 5.

This article is from the CBROnline archive: some formatting and images may not be present.

CBR Staff Writer

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