Sprint says iPhone users 'more profitable' than other customers

Posted:
in iPhone edited January 2014


In defense of Sprint's bet-the-company deal to carry Apple's iPhone, CEO Dan Hesse said that users of the device are "more profitable" on a whole when compared to other subscribers using phones running on other platforms like Android.



Hesse qualified his statement in an interview with Mobile World Live, noting that besides a low churn rate, iPhone users actually use less data on average than other smartphone customers using high-end 4G Android devices. The less bandwidth used by iPhone customers who have already paid for unlimited data plans presumably translates to lower operating costs and thus higher profit margins.



"So from a cost point of view and a customer lifetime value perspective, [iPhone users] are more profitable than the average smartphone customer," Hesse said.



In October 2011, Sprint first announced that it had made a deal with Apple to sell the popular device in what some called a "bet-the-company" move.



The nation's third-largest carrier was banking on recouping up front costs with subscriber revenue. Before nabbing the iPhone, Hesse was quoted as saying that the device was the number one reason his company was losing customers.



It was revealed in the Sprint's February 10-K report that the company planned to exceed the $15.5 billion minimum purchase agreement with Apple despite a decline in wireless profits due to high subsidy cost. The iPhone officially launched on Sprint's network in October, coinciding with the debut of the iPhone 4S, and the carrier sold 1.8 million units over the 2011 holiday quarter alone.



"Four out of every 10 iPhones we sold are for new customers," Hesse said. "That’s roughly double the rate of either of our competitors, so we’re pulling a lot of customers from our competitors."





Sprint CEO Dan Hesse (right) explains the company's iPhone strategy. | Source: Mobile World Live







Sprint's plan to offset subsidies with loyal iPhone subscriber fees seems to be working, and the bump in customer numbers is exactly what the company was looking for.



[ View article on AppleInsider ]

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Comments

  • Reply 1 of 24
    gtrgtr Posts: 3,231member
    Because, in general, they're cashed-up money brothers, not cheap-skates.



    I'm looking at you, Fandroids.
  • Reply 2 of 24
    This entire site keeps getting worse and worse by the post. You guys are turning into a site that is trying to prove why iOS is better than Android. Who cares? Choice is a beautiful thing, unless sites like this one feed the stupidity that is on BOTH SIDES of this senseless argument.
  • Reply 3 of 24
    Quote:
    Originally Posted by openminded View Post


    This entire site keeps getting worse and worse by the post. You guys are turning into a site that is trying to prove why iOS is better than Android. Who cares? Choice is a beautiful thing, unless sites like this one feed the stupidity that is on BOTH SIDES of this senseless argument.



    Who cares, well besides you?



    I actually find it pretty interesting that the Sprint CEO has these comments to say about the iPhone and its competitors.
  • Reply 4 of 24
    tallest skiltallest skil Posts: 42,990member
    Quote:
    Originally Posted by openminded View Post


    This entire site keeps getting worse and worse by the post.



    You have a history of complaining about Apple bias on an Apple website. Come off it.
  • Reply 5 of 24
    cameronjcameronj Posts: 2,357member
    Those who think that the marginal cost of an additional hundred megabytes is essentially zero will definitely disagree with the CEO of Sprint about his costs.
  • Reply 6 of 24
    dasanman69dasanman69 Posts: 12,939member
    Quote:
    Originally Posted by Soundvision View Post


    Who cares, well besides you?



    I actually find it pretty interesting that the Sprint CEO has these comments to say about the iPhone and its competitors.



    What else did you expect him to say? They bet the company on the iPhone. I highly doubt that at 5 months they've noticed more profit plus it's probably getting eaten up by the higher subsidy. Now the noticeable increase in subscribers is self evident and much easier to speak of.
  • Reply 7 of 24
    tooltalktooltalk Posts: 766member
    Quote:

    Hesse qualified his statement in an interview with Mobile World Live, noting that besides a low churn rate, iPhone users actually use less data on average than other smartphone customers using high-end 4G Android devices.



    I don't quite get this.. um... Sprint makes money when iPhone subscribers use a lot of data - unless of course, they are all on unlimited dataplan (which I don't think is the case here).



    am I missing something here?
  • Reply 8 of 24
    dasanman69dasanman69 Posts: 12,939member
    Quote:
    Originally Posted by openminded View Post


    This entire site keeps getting worse and worse by the post. You guys are turning into a site that is trying to prove why iOS is better than Android. Who cares? Choice is a beautiful thing, unless sites like this one feed the stupidity that is on BOTH SIDES of this senseless argument.



    Wait until you read Apple][s posts. He'll mention Android when the article doesn't.
  • Reply 9 of 24
    dasanman69dasanman69 Posts: 12,939member
    Quote:
    Originally Posted by tooltalk View Post


    I don't quite get this.. um... Sprint makes money when iPhone subscribers use a lot of data - unless of course, they are all on unlimited dataplan (which I don't think is the case here).



    am I missing something here?



    They are all on unlimited plans. Sprint is the only major carrier that still offers it.
  • Reply 10 of 24
    mhiklmhikl Posts: 471member
    Quote:
    Originally Posted by tooltalk View Post


    I don't quite get this.. um... Sprint makes money when iPhone subscribers use a lot of data - . . .

    am I missing something here?



    I also don't get it and was about to post on the fact. Hope someone comes round to explain this.

    I've previously heard on this forum that Apple iPhone users are more prolific users. Wouldn't that actually drive their expense in the other direction?
  • Reply 11 of 24
    dickprinterdickprinter Posts: 1,060member
    Quote:
    Originally Posted by dasanman69 View Post


    Wait until you read Apple][s posts. He'll mention Android when the article doesn't.



    Usually proceeded by the words shitty, clueless, stupid, cheap, dumb and other intelligent adjectives like that, then followed by a couple of these:
  • Reply 12 of 24
    fuwafuwafuwafuwa Posts: 163member
    Quote:
    Originally Posted by openminded View Post


    This entire site keeps getting worse and worse by the post. You guys are turning into a site that is trying to prove why iOS is better than Android. Who cares? Choice is a beautiful thing, unless sites like this one feed the stupidity that is on BOTH SIDES of this senseless argument.



    Write like this at phandroid's forums, and tell use their response
  • Reply 13 of 24
    fuwafuwafuwafuwa Posts: 163member
    Quote:
    Originally Posted by tooltalk View Post


    I don't quite get this.. um... Sprint makes money when iPhone subscribers use a lot of data - unless of course, they are all on unlimited dataplan (which I don't think is the case here).



    am I missing something here?



    Let me summarize what Hesse said for you:

    * iPhone users use less data

    * iPhone users are loyal, thus low churn rate



    If you don't understand why, let me explain for you:

    Android phones are data hog. If the user is a little knowledgeable, the phone will be used as proxy to download torrents. If the user is non-savvy, several malwares in the phone are doing malicious data transfer in background. And all of Android users are like to see ads than buy apps, thus more bandwidth are waste.
  • Reply 14 of 24
    dasanman69dasanman69 Posts: 12,939member
    Quote:
    Originally Posted by Dickprinter View Post


    Usually proceeded by the words shitty, clueless, stupid, cheap, dumb and other intelligent adjectives like that, then followed by a couple of these:



    You forgot the fucks he throws in here and there.
  • Reply 15 of 24
    dickprinterdickprinter Posts: 1,060member
    Quote:
    Originally Posted by dasanman69 View Post


    You forgot the fucks he throws in here and there.



    Just trying to keep it clean for the kiddies, I could've gone on and on and on...



  • Reply 16 of 24
    gtrgtr Posts: 3,231member
    Quote:
    Originally Posted by Dickprinter View Post


    Just trying to keep it clean for the kiddies, I could've gone on and on and on...







    He seems to occupy your thoughts a lot.



    Which way do you swing?
  • Reply 17 of 24
    gtrgtr Posts: 3,231member
    Quote:
    Originally Posted by openminded View Post


    This entire site keeps getting worse and worse by the post. You guys are turning into a site that is trying to prove why iOS is better than Android. Who cares? Choice is a beautiful thing, unless sites like this one feed the stupidity that is on BOTH SIDES of this senseless argument.



    I'm assuming you're referring to the choice between iOS and Google's iOS clone?



    Great choice!



    Quote:
    Originally Posted by dasanman69 View Post


    Wait until you read Apple][s posts. He'll mention Android when the article doesn't.



    And sometimes Apple ][ will be mentioned even when he hasn't posted.



    Pathetic, isn't it?
  • Reply 18 of 24
    zeromeuszeromeus Posts: 179member
    Every time I'm not on wifi, I feel very reluctant to go online because I can't wait for the data to load. I've never seen a speed test that would show me any number that is close to 1MB/s. If I'm lucky, I'd get .5 MB/s download.



    When the LTE iPhone comes to Sprint, they better let me upgrade at a reasonable price or they'll lose me as soon as my contract ends.



    At the highest level of data usage, my monthly data is well under 1GB... normally, it's around the 200MB mark.



    So as I said in the title... how could iPhone users hog data when they can't even get a reasonable speed?



    Just tested my speed with wifi off... the speed is 0.27 Mbps... keep in mind the lower-case b... that means the actual speed is less than .04MBps....



    Tested it with wifi on... 7.57 Mbps.. That's .95MBps



    So let's see... .04 MB/s or .95 MB/s ... which should I use... oh! Wifi, of course! See why I'm on wifi all the time? SO yeah... Hesse is right about iPhone users being on wifi more... because we can't stand their so called 3G speed... it's more like CDMA2000.... Why is my speed 12 years behind???
  • Reply 19 of 24
    This entire site keeps getting worse and worse by the post.



  • Reply 20 of 24
    orlandoorlando Posts: 601member
    Quote:
    Originally Posted by fuwafuwa View Post


    * iPhone users are loyal, thus low churn rate



    Considering how long Sprint has had the iPhone can we really say this? Typically people wait till the end of their contracts before switching carriers so October 2013 we will start seeing if people are actually loyal to Sprint.
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