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Sprint CEO Defends Company's Decision To Bet It All On the iPhone
zacharye writes "Sprint chief executive Dan Hesse is being watched closely by the company's board of directors, but the CEO has to answer to investors and subscribers as well. Last year in October, Hesse revealed that the company is placing a massive $15.5 billion bet on Apple's iPhone, and in a recent interview, Hesse defended the move, which has been criticized by a number of industry watchers. From the article: '“Subsidies are heavy for the iPhone. This is the reason why a high percentage of new customers is important,” Hesse said during the interview. “But iPhone customers have a lower level of churn and they actually use less data on average than a high-end 4G Android device. So from a cost point of view and a customer lifetime value perspective, they’re more profitable than the average smartphone customer.”'"
They pay more and use less? What a shocker! Who would have thought?
It's not even that. What he's saying is that 4G Android users use more data than iPhone (i.e. 3G) users do (shocking!) since iPhone is currently still 3G/"3.5"G, and the Android users are more likely to demand the newest gadgets (i.e. "higher churn"). Which is naturally worse for the phone company who wants you to buy whatever phone, keep it forever, and never use the speed you're paying for while still continuing to pay for it.
The problem is that newer, 4G iPhones are likely to attract exactly the same crowd. So unless Sprint's new business model is to keep selling obsolete iPhones forever, they had probably better get a new plan.