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The Real Reason Apple's iPhone Left Virgin Mobile?

The Real Reason Apple's iPhone Left Virgin Mobile?

Apple Inc. (NASDAQ: AAPL) fans rejoiced when Verizon Communications Inc. (NYSE: VZ) was rumored to carry the iPhone. It seemed like a pipedream, but the mounting evidence suggested that AT&T Inc. (NYSE: T) was about to lose its exclusive distribution rights.

Since that time, Apple has brought the iPhone to Sprint Corp (NYSE: S), T-Mobile US Inc (NYSE: TMUS) and numerous carriers worldwide.

Eventually, the iPhone also came to many pay-as-you-go carriers, including Virgin Mobile. That venture appeared to be somewhat successful, at least for retailers hoping to lure customers on Black Friday. Target Corporation (NYSE: TGT) and RadioShack Corporation (OTC: RSHCQ) were among the retailers that sold Virgin Mobile-specific iPhones at steep discounts during Black Friday 2012 and 2013.

Virgin Mobile appeared to be good for the iPhone 5C, which was thought to be a commercial disappointment. Virgin Mobile was the only carrier that sold out of its stock.

"I can confirm that we are currently sold out of the models as indicated on our website," Lorena Pino, Public Relations and Communications Manager at Sprint Nextel, told Benzinga in October 2013. "We expect to have additional units within a week or two."

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Virgin Mobile does not announce the sales numbers for any of its devices, so it is not yet known how many iPhones the company sold.

In November, a Virgin Mobile spokesperson told 9to5Mac that the carrier had no plans to carry the iPhone 6 or iPhone 6 Plus. Virgin Mobile still carried the iPhone 5S and iPhone 5C, but every version was out of stock.

In February Virgin Mobile removed the iPhone from its website, eliminating any hope that the carrier would re-stock the older models. No announcements were made regarding the iPhone 6.

It now appears an announcement will not be coming.

Instead of selling the iPhone directly to its customers, the carrier is pushing for existing iPhone users to switch to Sprint (which owns Virgin Mobile USA). Virgin Mobile has started sending out vague text messages to promote a new leasing offer from Sprint: "Right now, you can get your iPhone from Sprint with unlimited talk, text and high-speed data for only$50/month - plus your monthly device lease payment," the message claimed. Thus, it seems that Sprint removed the iPhone to focus on its core carrier instead of Virgin Mobile.

Benzinga has reached out to Virgin Mobile regarding the promotion. This article will be updated if and when the carrier responds.

Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.


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