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Verizon might have to pay Apple $14B as iPhone sales slow down

Back in 2010 when the iPhone first came to Verizon, the carrier reportedly made purchase commitments to Apple worth $45 billion. It hasn’t sold enough iPhones to cover this figure, which might result in Verizon have to pay some $14 billion to Apple.

There are only a handful of manufacturers that require carriers to make purchase commitments, Apple is one of them. The company has similar agreements with various other carriers around the world as well. This could be troublesome for Verizon, because it is highly unlikely that Apple will offer it any concession if it fails to meet the $45 billion. Doing so will set a precedent that Apple wouldn’t want other carriers quoting.


Under this multi-year deal that is said to have been signed in 2010, Verizon is obligated to purchase $23.5 billion worth of iPhones from Apple in 2013 alone, says Moffett Research, an investment research firm that studied SEC filings. This purchase commitment is nearly twice of Verizon’s iPhone sales in 2012, if that trend continues this year as well, Verizon could end up owing Apple nearly $14 billion.

Despite that, some analysts believe that Apple might consider bending the rules for everyone, seeing as how other carriers around the world are in similar situations. They have made purchase commitments but haven’t been able to move that many units, which is believed to be an indicator of iPhone sales going down. The light at the tunnel’s end for carrier’s could be Apple’s next generation iPhone, due this fall, it could substantially increase their iPhone sales.

Source: [iClarified]

Adrian Fonseca
Adrian Fonseca keeps a close eye on all Apple news, rumors, leaks and developments. In his spare time, he likes to read books.

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