Can Apple, Sprint Boost Their Bottom Line with Virgin Mobile?

Apple and Sprint are about to do the unthinkable: by July 1, they plan to bring the hugely popular smartphone to Virgin Mobile. According to the Wall Street Journal, this is all part of Sprint's S plan to make the iPhone, which it reportedly paid billions to obtain, more profitable for the cellular carrier. If this report is accurate, this will be the first time that a major OS has invaded Android's dominance in the pay-as-you-go market. While Leap Wireless LEAP already announced that it will provide its pre-paid customers with an iPhone option, the carrier is limited to a very small portion of the U.S. population. Since Virgin Mobile uses Sprint's network, it can reach millions of additional customers, providing almost the entire nation with coverage. Virgin Mobile is scheduled to add the iPhone at a time when Sprint's stock continues to suffer. While the company showed promise in the early summer months of 2011, shares declined sharply at the end of July, dropping from $5.16 on July 27 to $3.13 on August 8. Leap Wireless has been hit even harder, going $16.79 on July 1 to $6.27 by August 8. Whether or not the iPhone has what it takes to save either company remains to be seen. But in the months since the iPhone came to Sprint, the stock has struggled to return to pre-August 2011 levels. In the short-term, this might be a much better deal for Apple AAPL, which will now have a new opportunity to sell its iPhone. Instead of releasing a cheaper, smaller model, and instead of trying to one-up Android by diversifying its product line, Apple is slowly infiltrating new markets. Now Android, which essentially owned the pre-paid market, will be forced to compete with a phone that is much more powerful than any device currently available to pay-as-you-go customers. Apple is up 0.93% this morning in pre-market trading. Sprint is up 0.40%. Follow me @LouisBedigianBZ