Sprint Nextel Bittersweet Success w Apple iPhone | Jeff Kagan Tech Analyst

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Jeff KAGAN

Tech Analyst

     

Sprint Nextel is experiencing the massive win-loss scenario I had worried about. They are selling loads of iPhones, but that fact is also costing them a hefty sum.

Working with Apple is bitter-sweet. Big customer wins mean big financial losses, in the early years anyway.

Then why do carriers jump at the bit to do business with Apple? That’s the question. They pretty much all do.

Of the top companies, AT&T Mobility, Verizon Wireless, Sprint Nextel and C Spire sell Apple iPhones. However T-Mobile and US Cellular don’t.

With the iPhone, success comes at a very high price. Sprint saw a 5% increase in sales, but it’s losses jumped to $1.3 billion from $929 million a year ago. They sold 1.8 million iPhones at the end of 2011. Roughly 40% were sold to new customers. Sprint won 720 thousand new customers in the last few months of 2011.

That performance is impressive, but it comes at a steep cost. Sprint agreed to pay Apple $15.5 billion over four years.

As successful as Sprint was with the iPhone, they fell far beneath competitors like AT&T Mobility and Verizon. AT&T had 7.6 million and Verizon had 4.3 million during the last three months of 2011.

Sprint had a very strong quarter. It had been in a weakened condition several years ago. They brought in Dan Hesse as CEO just before the economic collapse. Sprint has had a helluva time catching their breath.

Companies like AT&T and Verizon have been growing very rapidly over the last several years. We expected Sprint to do the same. They have not.

Sprint is doing better than several years ago. At least they are heading in the right direction, but progress is painfully slow for some reason.

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Please attribute to Jeff Kagan, Tech Analyst with www.jeffKAGAN.com

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Jeff KAGAN| Tech Analyst www.jeffKAGAN.com

Analyst sharing perspective on the changing industry for 25 years

~ Also Columnist, Author, Consultant, Speaker
~ Column http://www.ectnews.com/perl/section/jeff_kagan/

Phone 770-579-5810 Email jeff@jeffKAGAN.com

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