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Verizon Could Owe Apple as Much as $14 Billion for iPhone Sales Shortfall

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USA based Verizon Wireless may owe as much as USD14 billion to Apple in unsold iPhone inventory according to calculations by an analyst.

Craig Moffett, an independent telecommunications analyst wrote that Verizon agreed a deal to sell at least USD23.5 billion worth of iPhones in 2013, which is about double the volume of handsets sold in 2012.

Based on an assumption that Apple doesn't have some sort of high volume sales low-cost handset up its sleeve for launch later this year, then Verizon could be facing a shortfall of as much as USD12 billion in sales, and have to make up the difference.

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

The revelation that Verizon made such a hefty sales commitment may reduce criticism of Sprint, which agreed a deal in 2011 to sell at least USD15.5 billion worth of iPhones over four years. That agreement was heavily criticized by analysts as representing too desperate a move by Sprint to secure the rights to sell the Apple smartphone.

On the web: Bloomberg News

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Tags: verizon wireless  apple iphone