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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.”'"
Your mother. :)
They pay more and use less? What a shocker! Who would have thought?
They are also more attractive and have great personalities
A contrived negative Apple comment. Who would have thought?
So it has come to this.
Soon as my contract is up I'm going back to a flip phone. Had an iPhone since they first came out, bought the 3gs, bought the 4, smart enough to realize the 4s was just more of the same, but with even more useless junk (Siri). Haven't touch my iPad in 2 weeks. It's too much and I've been working in tech since the early 90s, all I want now is simplicity.
Android users are fat, smelly losers.
-Sent from my iFag device using Fagtalk.
Can he defend their WiMax flub? Can he defend contracting with a company that has a non-existant LTE solution?
Keep the Classic Slashdot.
"No one ever got fired for buying Apple." It's a brave new world isn't it?
If all else fails, immortality can always be assured by spectacular error.
...gramps
"No one ever got fired for buying Apple." It's a brave new world isn't it?
If it fails, he will.
"First they came for the slanderers and i said nothing."
The SprintUsers site had an interesting commentary regarding a recent WSJ article on Hesse:
http://www.sprintusers.com/could-hesse-lose-his-job
Today’s Wall Street Journal has a rare, insider-rich piece targeting Hesse. A betting man would say his own board of directors had a lot to do with the story. No, no one on the board is quoted directly. But the picture the WSJ paints is certainly a flattering one of an engaged, hands-on board. They are served well by this story.
You don’t see this sort of knifing when an exec is secure in his job. It usually means board members are trying to distance themselves from a CEO’s plans gone wrong so they don’t get personally sued by shareholders. Or they’re getting ready to fire him.
Just last month, Sprint made an abortive attempt at a merger with MetroPCS, which was championed by Hesse but ultimately shot-down by the board. I have a feeling the company is going to experience a coup d'etat any day now. Well, whatever -- as long as my legacy SERO plan keeps working.
Ignore everything he says to justify iPhone on Sprint, what Sprint really wants is to get in on the Apple party.
As a Sprint customer with an Android 4G phone (but no 4G service in my area, and I pay $10/month for it), I really would rather that they spend that pile of money on building out their network. Sure, they're going to roll out LTE over the next couple years, but my phone isn't LTE. Dammit. And my city will be among the last to get Sprint LTE.
In the one corner Apple, in the other such winners as HTC, Motorolla, Nokia and Sony Ericsson. CEO's always get fired if they back the wrong horse, but he picked the one with the right odds.
If all else fails, immortality can always be assured by spectacular error.
I recently canceled Sprint and paid the ETF to do so. That's after having Sprint for nearly 10 years. I got an iPhone 4S with Straight Talk ( MVNO that uses AT&T's network). Why? Because I wanted a data service that works. With Sprint, I was frequently on 1X. Even when I was on 3G, the speeds were crap. Sprint bit off more than they can chew with the iPhone. WiMax was a bust. Nextel customers are leaving in droves and their Network Vision plan may well be the final nail in the coffin.
iPhone - Apple controls the entire look, feel, marketing, sale and support from the point of manufacture to the end sale. Result: end user has a usable device
Droid - Google puts out an OS that is used by several different crap manufacturers all with different hardware specs. Then the crap manufacturers put their own interpretation on the design of the UI, then the cell phone carriers put their own crap apps on top of that. Result: end user has a crap device loaded with trial-ware.
Wow, that's kind of depressing. I don't own a smartphone, but I work on them, and the world is a better place when there are more platforms to choose from. This is why I also hope the Blackberry Playbook survives too.
"First they came for the slanderers and i said nothing."
I bought my 4G phone almost 2 years ago and have yet to see any 4G service. Yet all the other carries seem to have it...
Visit the Arcade Restoration Workshop @ http://www.arcaderestoration.com
If you wany an apples to apples comparison, you should, at the very least, compare mobile web traffic from iOS to mobile web traffic from high-end 4G Android device - which is what the CEO was talking. And no one seems to ever announce this sort of data.
Stop with the fanboism. Seriously.
Totally forgot about RIM, but then who hasn't ;-)
If all else fails, immortality can always be assured by spectacular error.
He's a fucking idiot.
Same as others have already posted long time sprint user paid the early termination fee. Tired of waiting for them to get their act together. Bad decisions constantly....... Never using the money to upgrade their network properly. Funny thing is he talks about 4g that most people can't get on sprint and the iPhone isn't even 4g so its a bad comparison shows he is a fool. Get out while you can its a sinking ship...
I love it when some suit mouths off to customers about how profitable they are. guys - you're great... for my wallet!
I wonder how much Sprint makes selling the customer list - after all, someone who chokes down Apple's margins is likely to buy other stuff that's well-marketed.
and how poorly their service works in some places Sprint truly is planning to be the next AT&T.
Seriously, WiMax coverage seems to work specifically in upscale neighborhoods and dense metro areas with practically none outside of there. Heck, I live in a reasonably nice area, but WiMax stops right at NASA Parkway and doesn't go much South of there. Up North it works in the main parts of Kingwood, but not the outskirts.
Their 3G coverage is similarly sparse. The fact I actually saw a Sprint store in Baton Rouge surprised me as claiming to have 3G coverage in the Baton Rouge metro is stretching the truth a bit, Galveston is right on par with Baton Rouge. If you so much as leave 3G on when you're in Galveston or most of Louisiana your battery will pay a steep price for it.
I love my Evo, Sprint 3G works great in most places I spend my time, save Louisiana and Galveston, but they're going to piss a lot of Hipsters off if they don't really step up their service before they start selling this phone.
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But the rat takes the same amount of time to digest as a mouse, near enough. There is a limit to how much a snake can or will eat.
Help stamp out iliturcy.
My data cap is higher than 2GB, not sure what it is (might actually be unlimited, Verizion is nicer to business customer and my employer pays for the phone). However I don't use much, 1-2GB at most for most months since I prefer computers for my web surfing.
However when I do use it, the LTE load times are really nice. Stuff loads FAST. So when I'm in a store and I need a price check on something, I can get it in a hurry, I'm not waiting around forever for pages to load, even when they are non-mobile pages.
Not saying data caps don't need to be raised, but more speed is nice.
Hell same thing at work, I've got a gigabit connection to my computer and there is sufficient backhaul that 100-300mbps transfers aren't uncommon, sometimes more depending on the place. I can't use that all the time, I share with lots of other people. If I tried to torrent all day long I'd get a call from NetOps in a hurry, and get fired if I didn't stop. However when I need something, like an OS ISO (torrent if Linux, the VLSC if Microsoft) I can have it done in minutes. The higher speed is very nice, even though I can't slam it all the time.
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That's one of the reason companies like Apple users: They tend to have more money than sense. Ok maybe that's unfair, but there are a lot of them who are in to being trendy, and are willing to spend a premium on that. That's why they buy Apple products. Apple is cool right now, as cool as it gets, and they'll spend the premium to have that.
That is a wonderful market to sell to. You don't want a bunch of miserly customers who want to nickle and dime everything and spend as little as they can. My parents had that bad when they ran a quilt shop. Not a high margin business anyhow and most customers would only buy if it was a deal. No, much better to have people who will just spend on anything that is cool or that they think they might want, and then not really use it. WAY more profitable.
Not saying it isn't kinda mean, but it is reality.
iPhone users use less data on average because many of them don't even need a data plan. But they must pay for one. A "high-end 4G Android device", on the other hand, is more likely to be chosen by the spec-optimizing, lives-on-the-internet, gonna-use-everything-I-paid for geek crowd.
Hey where is Samsung, http://www.bloomberg.com/news/2012-01-05/samsung-profit-beat-estimates-as-galaxy-phones-lure-consumers-from-apple.html , Huawei http://www.bloomberg.com/news/2011-04-17/huawei-technologies-profit-rises-30-led-by-higher-international-sales.html or Google on your list http://investor.google.com/financial/tables.html . All of these companies have profits growing between 20 and 30%.
I left sprint because they had no decent phones. I ended up going to AT&T for an iPhone but I was looking at Palm and Windows devices at the time. Sprint customer service was rude and they didn't seem to care to keep us. We're were planning on doing a big upgrade on our plans too.
Getting decent phones was a problem for them a few years ago. Their customer service was worse and if you didn't live in the right area the network was also a problem. I happened to live in a good sprint zone. Making a deal to get better phones was a good idea, but they should have started with customer service training and wanting to retain customers or it doesn't matter.
It doesn't matter the deal was with Apple. It could have been samsung for an android line or something else. They badly need phones that people want. (diversity matters)
At this point, I've been with Sprint, AT&T, Verizon and T-Mobile. They all suck and for different reasons.
MidnightBSD: The BSD for Everyone
Not sure about anyone else but they will be loosing me as a customer.
Sprint just raised prices mid-contract (only $5/mo but it could have been $1000 from the terms of the contract). When I called to get clarification they pointed me to the clause in the contract that says this: "We may change any part of the Agreement at any time, including, but not limited to, rates, charges, how we calculate charges, discounts, coverage, technologies used to provide services, or your terms of Service." They then will give you 30 days from the time of first notice (which is made on page 4 of the bill 30 days before the price is raised so by the time you see the price change you are already passed the 30 days) to drop Sprint if you wish. Of course that means sending back the $200 phone I paid for and getting nothing in return (no return charge and no phone). Basically this says is I am stuck with the agreement but really get nothing from it. They can change the price, length of contract, anything at any time and if I make changes then I get an early termination fee.
The long and short is I am stuck with Sprint but will be moving away from them upon contract end and will never go back. I don't like to do business with companies that operate like this. I read the contract before but somehow must have missed this gem of a clause. I won't make that mistake again. It may be just me but any company that would ask the customers to sign something like this is no company I want to be doing business with. For the customer you are basically agreeing to pay an unknown amount if you quite (they can change that too you know) for an unknown amount of time at an unknown price. The simple fact that they have not raised you monthly rate to $1000/month and extended you term to 10 years with a $5000 ETF does not mean they legally can not. To sign something like this is simply foolish IMO. A mistake I do not intend to repeat.
The fact that this price raise might be to cover new iphone subsidies just adds insult to injury. Next time I will buy my phone outright and use only prepaid services. The terms of service for all carriers are much too long to even bother with. Just another way that U.S. business is at a disadvantage compared to many other countries.
I had a plain old cell phone for years on Sprint, and never liked the phoney "regulatory recapture" fees. Nor did I want to start paying $100 a month just to have a smartphone. Their network, in places I tend to be, is good though. So I dropped Sprint and went to Ting, where you pay for your phone up front (no subsidy), but then for voice/text/data pay by actual usage, with nothing extra for the WiMAX flavor of 4G, or for using the phone as a wi-fi hub to tether other devices. Since I'm not a huge mobile data user (plenty of free wi-fi around usually) I don't text, and don't love talking on the phone, it looks like for about what I was paying just for the old cell phone I now have the wi-fi hub feature, plus something the kid can play Angry Birds on.
Ting doesn't have iPhones - not that I'd want one. But it's phones are better than most low-cost providers'. And I have no idea if they'll be able to follow Sprint into LTE, or remain stuck in WiMAX. But the other low-cost providers are stuck in 3G, so WiMAX is a nice advantage for now.
"with their freedom lost all virtue lose" - Milton
They pay more and use less? What a shocker! Who would have thought?
Well, according to TFA, the problem is they don't pay more, both for the phone and the data. Your problem, poor little hateboy.
Fandroids hate facts.
They should have given more love and better advertising to the Pre. I moved from ATT to Sprint just to get one. And at the time, I would never have even known it existed had a friend not told me about it.
Also,
Sprint is the only carrier I know of that charges per minute to forward calls. When at home, I used to forward to my vonage line so people could get in touch with me. That was a wakeup on the first bill from sprint!
Google's revenue isn't from mobile directly. Samsung refuse to release numbers so smartphones may not be responsible for their rise in profits, it may be all those components they are selling to Apple (like the new iPad retina screen.) The Chinese are doing quite well on the low end but that's not good news for the smartphone industry because it means the rest of them are caught in the squeeze between the Chinese on one end and Apple on the other. On the whole, if you're not Apple, the market is pretty crummy right now.
If all else fails, immortality can always be assured by spectacular error.
Funny, I have a "High end Android device" and I have yet to see a 4G signal anywhere in Detroit. Sensorly tells me there are other 4G signals around me. Hell even Metro PCS has a 4G signal.
I guess Sprint's idea is to sell you fancy devices along with a monthly surcharge while not actually having to provide the service. Even their 3G signal is weak in most areas of Detroit.
Hey Dan, no I can't hear you now!
>>Next time I will buy my phone outright and use only prepaid services.
Good luck finding this in the US. I sure couldn't - not with data anyway.
Social Credit would solve everything...
the way I look at it you're a fool if you repeatedly spend hundreds of dollars on ay device (or anything else, for that matter) that doesn't deliver or live up to the user's expectations. too many ipods, iphones and ipads have been sold to say that idevices are for fanboys only - because RATIONAL people don't continually pay hundreds of dollars for a shit product.
"your favorite company has a brand like Prada and Porsche that people will pay assraping prices for that half eaten Apple logo" -
ASSRAPE is the $500 bucks early adopters plunked down for the TouchPad, only to see an 80% discount within WEEKS of launch. Motorola, RIM, HP, Samsung - all have tablets (in the 9" plus range) that startED at the same price (or within $100 bucks) of an ipad3. Newegg lists a new 16GB transformer prime (no keyboard) for $399 - the same as a new, wifi only, ipad2. I don't see where assrape pricing comes in to play. Given the paltry sales figures for all of the other tablets, the MARKET (not fanboys) has spoken: price/value is not there - even after the ~$100 price drop on most of those lines.
I would say the percentage of people buying their second/third/fourth iphone/ipad/ipod/mac did so because they were satisfied with their purchase the first time. those who keep giving money to Apple because they ENJOY assrape are an insignificant minority. THIS SIMPLY DOESN'T HAPPEN: "I hated my first idevice, but I'm going to get up at the crack of ass so I can be first in line for the next one"
I don't think you can use branding to describe the reason for increased sales (units sold) year over year because the branding was there the first year; that half eaten piece of fruit was on the back from DAY ONE. the brand didn't change - yet the facts remain: ipod IS the PMP market, iphone 4 sold more than the previous phones combined.. ipad (so far), is on an ipod trajectory. Most of the people I know who use an idevice of some kind do not own macs. They are, by definition, not fanboys and dont drink the branding kool-aid.
so how DO you explain increased unit sales?
1) fanboy virus spreading?
2) reasonable price/value ratio?
IMO #2 contributes to #1, and IF price/value is a contributing factor.. fanboyism/branding become less relevant. if you read the "interviews" with people in line for the new ipad a couple weeks ago.. a significant number of them were buying their first ipad. "Fanboys" do not wait for the 3rd iteration.