Sprint's in a tough position as they've spread too thin. The acquisition of NexTel was considered one of the worst acquisitions ever and now, with Verizon pushing 4G LTE, Sprint is left spinning as to which direction they want to take. They struck a deal with ClearWire so that their 4G network could utilize WiMax, but along with the announcement of the iPhone, Dan Hesse has also stated that the company will need more investment so that they can pursue a 4G LTE network. After investing so much into WiMax, they're now asking for money to go for LTE. They lost a huge amount of investor confidence with their vague reasonings as to what exactly the future of Sprint held.
With the lack of investor confidence, the release of the iPhone becomes an even bigger gamble, mainly due to the cost. Sprint will not generate a profit on the iPhone until at least 2014, and that's only if customers join Sprint for the iPhone. Verizon's delve into the iPhone space didn't exactly meet expectations for stealing customers away from AT&T, though existing customers definitely were interested. This leads to the question of whether or not people are willing to break out of their contracts to join another carrier for the iPhone. It also doesn't help that the iPhone 4S is not going to be exclusive to Sprint, but rather available to AT&T, and Verizon as well, which spreads out the competition.
So the question becomes, who exactly is the Sprint iPhone targeting? Sprint's big gamble is gaining new customers, but it seems even Verizon's iPhone was unable to pull customers away from AT&T. With the acquisition news, T-Mobile customers are swaying and they could be the prime target for Sprint, but is the iPhone enough? Many T-Mobile customers may assume that with the AT&T buyout that they will have access to the iPhone soon anyway. So once again, the question becomes, who is Sprint targeting? If it's their own current customers, their net customers will remain unchanged, if it's from competitors, there's no uniqueness to Sprint that draws them in.
Sprint is taking a huge gamble, taking on both the 4G LTE network expansion and spending so much money on the iPhone. Dan Hesse could be making a bold move, believing that Sprint has to survive if there are only three main telecommunications carriers after the buyout of T-Mobile, maybe he believes that the U.S. government will not allow an alternative -- one of the last few remaining alternatives to fail. This gamble is one that could make or break the 3rd largest national telecommunications carrier and shake the industry by causing a competitor to flat out fail or make history by being a telecommunications carrier bailed out by the government.