A partnership with Apple (NASDAQ:AAPL) is not serving Leap Wireless (NASDAQ:LEAP) as well as the operator would have hoped. Leap, whose prepaid service Cricket started carrying the iPhone in June last year, said in a securities filing that it only expected to sell about half the devices it committed to in the first year of its agreement with Apple.
Leap said it could end up with $100 million worth of unsold iPhones by June, though it added that it was working to improve sales with marketing and financing options for buyers.
The acknowledgement, made in a filing with the U.S. Securities and Exchange Commission, was something of a surprise, as chief operating officer Jerry Elliott had said in a conference call with analysts last week that “sales of Apple devices were pretty good in the fourth quarter.”
Leap spokesman Gregory Lund told The Wall Street Journal on Thursday that the company was in discussions with Apple. Lund said Leap had also seen lower-than-expected overall customer additions in the fourth quarter.
The news would also be an upsetting one for Apple, which has been dealing with its own concerns over slowed iPhone sales…
Leap, which has an approximate 5.3 million subscribers, started carrying the iPhone 4 and iPhone 4S in June 2012. It started selling the iPhone 5 on September 28, 
one week after AT&T (NYSE:T), Verizon (NYSE:VZ), and Sprint (NYSE:S) received the device.
The commitment with Apple was said to be worth $900 million, with estimates that Leap was paying the iPhone maker a subsidy of $150 on every contract-free iPhone 4S sold. Cricket’s pay-as-you-go pricing plan charges customers $55 per month for unlimited talk, text, and data.
Moody’s Investors Service downgraded Leap debt on Tuesday by one notch into junk territory on iPhone purchase commitment concerns.
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