iPhone sales have declined significantly over the recent months. A number of analysts had to readjust their calculations of per-quarter sales to account for this. However, this may cost Verizon more than a rehashed opinion. The carrier may end up owing $14 billion to Apple if it doesn’t sell enough iPhone by the end of this year.
Back in 2010, Verizon inked a deal with Apple which included the carrier selling some $23.5 billion worth of iPhone during 2013. This may have sounded perfectly plausible three years ago, but the recent slump in iPhone sales has been rather unexpected and it may cost Verizon dearly.
According to Moffet Research, “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.”
It is significant to note here that barely any other vendor apart from Apple is able to command such massive deals with the wireless carriers. Then again, iPhone has been a roaring success so far and it is expected that once Apple comes out with the next iPhone, it will yet again be a huge, wild success.
It remains to be seen how Verizon tackles the gaping blackhole that awaits it by the end of this year, in the form of the money it would owe to Apple. Perhaps the carrier will be able to renegotiate the deal with the iPhone-maker.
Courtesy: LA Times