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Killed By Apple's iPhone: Is Sprint Next?

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Serial killer? [Getty Images via @daylife

Sprint shares fell more than 4.5% Monday after Sanford Bernstein argued that a bankruptcy filing for the wireless carrier is “a very legitimate risk.”

Bernstein analyst Craig Moffett blamed iPhone. Sprint signed a rich contract with Apple last year to get the phone on Sprint’s network. That could create problems when Apple introduces a handset built around the high-speed LTE technology available on new iPad.

Analysts expect Apple’s next handset will offer support for the standard, now supported by Apple's latest iPad tablet computer. To keep up, AT&T and Verizon are spending billions to upgrade their wireless networks.

Bernstein’s Moffett frets that debt-laden Sprint won’t be able to keep up. Sprint has $1.8 billion due through the end of 2013, $1.4 billion in 2014, and another $2.6 billion in 2015 “If Sprint’s performance is not substantially improved from current levels by that time, capital may not be made available for the refinancings,” Moffett writes.

“Sprint doesn’t have enough free-and-clear spectrum on which to launch a competitive LTE network, and it doesn’t have the money to clear spectrum that’s already in use,” Moffett argues. “We expect Sprint’s competitiveness to begin to backslide when LTE becomes the nation’s de facto standard.”

If the analyst is right, Sprint wouldn’t be the first company to get swamped by the iPhone. Under pressure from Apple, struggling smartphone vendor Palm was purchased by Hewlett-Packard in 2010 for $1.2 billion. HP shut down its smartphone business last year.

Canada’s Research In Motion has been squeezed, too. Its share of the worldwide smartphone market has fallen sharply, as it has been squeezed between Apple and companies such as Samsung building smartphones based on Google’s Android software. And RIM’s PlayBook tablet, hyped as an alternative to Apple’s iPad, has flopped.

While Adobe has fared better -- the multimedia software developer remains profitable despite a flat stock price over the past year -- its Flash multimedia platform has been hurt badly by Apple Chief Executive Steve Jobs’ blunt criticism of the technology.

Correction: the original article incorrectly stated that Sprint had $1.8 billion due in 2012; it is due through the end of 2013.