BayStreet Research said that, based on industry checks, Sprint’s Virgin Mobile could sell between 100,000 and 300,000 iPhones through its new Inner Circle online offering, which provides inexpensive iPhones coupled with a free year of unlimited service to customers who purchase the offering through the internet.
However, the firm noted that figure represents a relatively small drop in the bucket when compared with the roughly 12 million iPhones Apple sells in the U.S. market every quarter.
BayStreet said it estimates that, on average, Virgin today sells around 100,000 total phones every month via its online channels—representing around 30% of its total quarterly sales. The firm said that the new Inner Circle plan could result in sales of up to 300,000 phones during the promotion, which is scheduled to end at the end of July.
After months of hints about a forthcoming, iPhone-focused effort, Sprint’s Virgin recently unveiled its plans with Apple to sell nothing but iPhones. The company will sell a year of unlimited data for $1 to users who buy an iPhone and port their number to the new Inner Circle plan by July 31, or to current Virgin users who upgrade to an iPhone.
The deal will be available exclusively through Virgin’s website and at Apple retail stores. Handsets for the service start at $279 for the iPhone SE and top out at $770 for the iPhone 7 Plus. After the first year, unlimited service will cost $50 a month.
The effort is geared to jazz up Sprint’s prepaid sales. Sprint in its most recent quarter added 180,000 prepaid users, marking its return to growth in that competitive market for the first time in two years.
“This is an intriguing bundle, but it's difficult to ignore the paradox: Virgin Mobile has been a struggling low-cost Sprint sub-brand selling inexpensive Android smartphones and basic handsets. It's now attempting to evolve overnight from being a prepaid and pay-as-you-go player focused on delivering value-for-money services, to becoming a wine-and-iPhone, international jet-setting service provider,” wrote the analysts at CCS Insight on the company’s blog. “This strategic move does distinguish Virgin Mobile from Sprint's other prepaid sub-brand, Boost Mobile, and other wireless service providers in the U.S., and the agreement it has with Apple creates a new channel for Virgin. In a market that's becoming increasingly competitive, expanding distribution in a cost-effective manner is a shrewd move.”
The firm added that, while it’s unclear whether Virgin’s new Inner Circle will ultimately elevate the brand, it’s a “laudable effort to stand out in a commoditized market.”
Article updated June 30 to correct information on BayStreet's prediction. Article updated July 1 to correct information about Virgin.