In Spite of Costs and Speed Issues, Sprint Revels In iPhone 4S Investment
Sprint’s deployment of the iPhone 4S on its network has been incredibly costly and fraught with early technical issues. But in spite of the price tags and tech headaches, getting the iPhone has been a lifesaver for the U.S.’s third-largest carrier.
Almost immediately after it became official that Sprint was getting the iPhone, skeptics began handicapping how long and to what degree Sprint would fail at offering high quality services for the iPhone 4S, and balking at the deal that Sprint had to cut with Apple to land the iPhone product line. But in the end, getting the iPhone 4S and accompanying iPhone 4 has been — for the short-term at least — a net win for Sprint.
Speaking on the matter, Sprint CEO Dane Hesse commented that their deal with Apple to secure the iPhone has been ”worth every penny,” and that the iPhone’s real value is not simply its high-profile in the marketplace, but rather how the iPhone performs on Sprint’s data network, which is turn is solidifying the company’s ability to continue offering its industry-leading unlimited data plan.
Hesse explains: “One of the beauties of carrying the iPhone is it extends the period of time and increases the likelihood of us maintaining unlimited data longer because it uses our network so efficiently.” And analysts are confirming what Hesse is saying: the iPhone 4S consumes approximately 50 percent less data compared to its Android competitors.
Sprint has a large nut to crack when it comes to the iPhone 4S: their deal with Apple requires them to purchase 30.5 million iPhones from Apple over the next four years, and they are paying almost 40% more for each handset. But the value for Sprint is how the iPhone 4S is onboarding new customers, and plugging up the loss of customers to AT&T and Verizon for not having the iPhone in the past. Hesse confirmed this by commenting: “Our early results selling the iPhone and iPhone 4 confirm the iPhone’s ability to attract new customers.”
Even if Sprint’s profit margin on iPhone sales pales in comparison to AT&T and Verizon, their ability to bolster their subscriber numbers will be a major windfall for them over the long term.
By Michael Nace