Sprint Corp. Taps Apple, Inc. for a Smart Long-Term Sales Boost

Sprint is on a roll right now. The stock has gained more than 30% in just two weeks, partly thanks to a strong first-quarter report. But the wireless network giant is not ready to rest on its laurels. That 30% surge includes a 10% leap on Monday, when Sprint leaned on mobility giant Apple for another unexpected boost.

The company grabbed eyeballs and stock returns with a new program known as iPhone Forever. As the catchy name implies, Sprint customers can always be sure to have the latest and greatest Apple phone in their hands.

Come for the leasing..."Anytime customers don't have the latest iPhone, they are eligible to upgrade. They bring their iPhone, upgrade on the spot, and away they go," the press release stated. "It's that simple."

Looking for a quick branding boost? There's this good-looking partner in Cupertino ...

It's not an add-on to existing plans, but simply included in the regular price of eligible Sprint calling plans. I should note that the $22 monthly lease payment under this plan is a little bit more than the $19 per month you'd pay for a 16-gigabyte iPhone 6 Plus under Sprint's regular terms today. It's also comparable to the regular lease agreement for Sprint's version of the SamsungGalaxy S6 Edge and other flagship smartphones.

Again, under this program, you get to swap out that iPhone for a newer device whenever Apple comes up with a better version. Or you could simply sit on that lease until it expires and then sell it back or pay it off like you'd do with any other lease agreement.

But really, who would do that? And that's where the genius in this program really lies.

... and stay for the iPhoneSprint has found a way to keep iPhone fans perpetually leasing the latest and greatest model at all times. Until Apple loses its mainstream appeal (don't laugh -- this happens to the best of 'em), the network has a nearly guaranteed long-term revenue stream here. The trick to turning a profit from lease-style sales is to keep the customer coming back for a renewed contract, and this is a very smart way of accomplishing exactly that.

If you paid attention to Sprint's latest earnings report and analyst call, you'll know that lease sales are a very big deal for the company right now. After kick-starting a brand-new leasing option last fall, over half of Sprint's new phone sales come with lease-type financing today.

The innovative program also moves Sprint's handset costs from the income statement to the cash-flow statement. Currently, CEO Marcelo Claure and Chairman Masayoshi Son are looking into new ways to cover those expenses, including a special line of credit secured by the market value of thousands of handsets. It's like those securitized mortgage bonds you heard about in 2008, only reimagined to fit a different style of valuable assets.

Keeping customers cycling into and out of brand new iPhones will give Sprint an eternal supply of nearly liquid phone-based assets, and the secondhand market for gently loved iPhones will become vibrant indeed. Don't forget that Claure forged his original fortunes as founder and 42% owner of Brightstar.

This could workFor those unfamiliar with that name, it's a privately held company that distributes wireless devices around the globe -- with a focus on developing markets such as Latin America. Don't tell me that a pre-owned and refurbished American iPhone can't find a comfortable and profitable second home in Brazil or Argentina. The supply chain play here is pretty obvious, and also pretty darn smart.

So Claure is playing to his strengths while taking direct advantage of Apple's brand-name mojo. If Sprint shares ever deserved a quick 10% boost in a single day, this would be it.

Mind you, Claure still has plenty of work to do. Sprint shares are still down 19% over the past 52 weeks. The company is still unprofitable and burning more cash than it makes on a trailing basis. And the subscriber situation is tenuous at best -- it counts as good news when Sprint's customer defections simply slow down a bit.

Still, progressive ideas like this one show why the wireless industry would be wise to take Sprint seriously nowadays. With Claure at the helm, under the wing of equally innovative mobility genius Masayoshi Son, Sprint has an honest shot at staying relevant in this cut-throat market. The turnaround is working, and this move will certainly help.

The article Sprint Corp. Taps Apple, Inc. for a Smart Long-Term Sales Boost originally appeared on Fool.com.

Anders Bylund has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.