The U.S. carrier had an overall bad quarter with a significant $1.5 billion loss, but it continues to sell iPhones at a 1.5M /clip. Solid clip. While its U.S. carrier competitors both saw iPhone activations decline from the previous quarter, Sprint actually stayed stable, and, in doing so, made some progress in catching both AT&T and Verizon. Some of that big quarter loss was attributed to paying upfront for iPhones, but clearly Sprint is not in good shape all around.

The quarterly year-over-year increase in net subsidy is primarily due to the launch of the iPhone, which on average carries a higher subsidy rate per handset as compared to other handsets. The sequential decline in net subsidy is primarily due to lower postpaid and prepaid gross additions…

Quarterly year-over-year increases in sales expenses were offset by reductions in customer care and marketing expenses. Sales expenses increased year-over-year primarily due to iPhone point-of-sale discounts (subsidy) for devices directly sold by the manufacturer to indirect dealers in which Sprint does not take device title…

Sprint’s prepaid subsidy, Virgin Mobile, began selling the iPhone this quarter without subsidy. It is not clear how many pre-paid customers signed up for $650 iPhone—even though the $30/month unlimited data rate is the best in the U.S.

Sprint’s Virgin Mobile USA brand began offering the iPhone to prepaid customers. Virgin Mobile also launched HTC EVO™ V 4G and Boost Mobile launched HTC EVO Design 4G™ bringing the combination of 4G WiMax and the award-winning EVO family of devices to prepaid customers.

Apple announced that it sold 26 million iPhones in the last quarter, upsetting some analysts. Receiving the blame was stagnating economies in Europe and elsewhere and rumors of a new, more awesome iPhone (which should be launched in the September-October timeframe :D )

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