Earlier today we told you that the iPhone 5 looks set to be released in September after reports of Apple hiring staff, and AT&T tipping off some of its employee’s. Now there is news that RadioShack has ditched T-Mobile in favor of Verizon Wireless, which starts in September. With this in mind could the RadioShack and Verizon deal coincide with the iPhone 5 release?
The deal will allow RadioShack to have access to the carrier’s large customer base, which is the biggest in the country according to an article on Cnet. But it may be move designed to get away from T-Mobile which is currently in the process of being taken over by AT&T. The deal is set to begin on September 15th which could be the release date for the new iPhone.
My colleague Jamie Pert speculated earlier when the device could be announced, and it could easily tie in with the start of the RadioShack Verizon deal. Jim Gooch the Chief Executive of RadioShack said “This is a substantial win for our customers, as this relationship with the nation’s largest wireless provider will further enhance our position as a leading multi-carrier wireless retailer”.
RadioShack has been struggling recently as it reported that its second quarter profits dropped by over fifty percent compared to a year ago. Some of this drop was put down to the company clearing out old T-Mobile stock, and the costs of closing down a manufacturing plant in China.
It has taken into account the costs of changing over to Verizon which stand at $3 million. While in the third quarter it has to take into account costs of $23 million for a payment to T-mobile, and additional inventory charges.
The company is looking to the Verizon Wireless deal to turn around its revenues, and will start selling Verizon stock the day after it stops selling T-Mobile products. They already offer products and various services from the likes of AT&T and Sprint.
Recently the retailer has tried to reinvent itself as “The Shack”, and attempt to concentrate its efforts on the mobile market, just what other similar retailers have also done. What RadioShack has in its favor is the large number of outlets it has, which will make the company an attractive distribution outlet.
The retailer accounts for around five percent of handsets sales for the carriers it currently services, and would result in a loss of about 690,000 new subscribers each year for T-Mobile. This won’t be the first RadioShack Verizon tie up as it previously split from the company in 2005.