Sprint won’t make profit out of the iPhone until 2015

Sprint won’t make profit out of the iPhone until 2015
Sprint’s chief executive Dan Hesse bet the farm on getting the iPhone to the nation’s third-largest carrier in a $15.5 billion deal spanning over the next four years, but will the operator ever profit from the iPhone? If you ask Hesse, the decision he took is the right one and while the fruits of it aren’t immediately visible, it will pay-off in the long term. But looking at the present, it’s a tough time for the carrier and the CEO will be the first to confirm it as he slashed $3.25 million off its salary to please shareholders. 

And about that iPhone? “We’re very happy with it,” Hesse said at the company’s annual shareholders meeting. “Carrying the iPhone will be quite profitable.”

The main benefit the Sprint chief executive saw is the slow down of subscriber turnover and the creation of a new segment of higher-value subscribers.

“We believe in the long term,” Hesse said. “And over time we will make more money on iPhone customers than we will on other customers.”

So far, Sprint has gotten some positive results. Revenue per user increased 6.9%, the biggest growth ever recorded in the US, so maybe indeed all it really takes is time.

source: AllThingsD

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38 Comments

1. android_hitman unregistered

by then iPhone will not be so popular anymore :) so no more profit for you greedy Sprint

6. sithman

Posts: 299; Member since: Apr 21, 2012

Y won't it b?

2. RoyalTroll

Posts: 32; Member since: May 16, 2012

Exactly, by the iPhone won't be as popular especially with bb10 and wp8 coming out. People get bored of the same s**t and eventually they will switch.

3. bragzter

Posts: 53; Member since: Feb 21, 2012

Apple is asking too much from carriers. So even if the carriers don't make any profit, they're already got paid, thus increasing the bottom line and smiling all the way to the bank.

4. Sniggly

Posts: 7305; Member since: Dec 05, 2009

You forgot the part where you corroborate the headline with content in the article. But I'll go ahead and do it for you: "By its own admission, Sprint won’t profit from the device until 2015." Direct quote from the AllThingsD article. Now the trick will be to see if Sprint survives until 2015.

7. sithman

Posts: 299; Member since: Apr 21, 2012

Well said sniggly. Sprint was in trouble long before they got the iPhone. It's saving the subscribers, that's a plus rite there.

8. Sniggly

Posts: 7305; Member since: Dec 05, 2009

I think what's really going to help Sprint is if they get a worthwhile 4G network up and running. WiMax was their biggest mistake ever.

29. miles16852

Posts: 241; Member since: Oct 20, 2011

Well Sniggly, maybe YOU should kick Dan Hesse out of his chair and take over, then we will surely see Sprint DIE WAY BEFORE 2015!! Ill bet the farm Dan Hesse and SPRINT will be around longer then you will live!

30. Sniggly

Posts: 7305; Member since: Dec 05, 2009

Lol, u mad bro?

31. miles16852

Posts: 241; Member since: Oct 20, 2011

nope! and im not a bro either! i dont talk ghetto! but your business sense sure is ghetto!

32. miles16852

Posts: 241; Member since: Oct 20, 2011

i dont have sprint either, i have Tmobile :-) so why would i be mad! or is it just because you try to read how sprint will die? lol, your just guessing like the rest of the so called commentors about sprint dying,! just sounds like you jealous instead

36. Sniggly

Posts: 7305; Member since: Dec 05, 2009

I'm sorry, refresh my memory; who are you and why should I pay attention to you, like, ever? And... Why should I be jealous?

5. jmoita2

Posts: 930; Member since: Dec 23, 2011

Well, you make a deal with the Devil guess what??? You get screwed.

9. bubbadoes

Posts: 1225; Member since: May 03, 2012

good luck!!! the iphone will be extinct by then....

10. ZayZay

Posts: 571; Member since: Feb 26, 2011

I don't see how the iphone will be "extinct"... Sure it's "boring"... but won't be "extinct"... with all the people having macs and the sync and ease of use... People will still buy.... But by then Sprint might be "extinct"

11. SoJUICED

Posts: 11; Member since: May 14, 2010

well sprint is at its largest subcriber base ever and continuing to climb...

13. 14545

Posts: 1835; Member since: Nov 22, 2011

As with everything, this is the new device effect. So when the shininess of the new iPhone being on their network wears off they will be back at square one. At crappy network with subs leaving hand over fist. Like I've said numerous times, network first, then focus on the phones. This will sink them before they are ever profitable.

27. lsutigers

Posts: 832; Member since: Mar 08, 2009

I see your point but subscibers probably wont be leaving Sprint once their Network Vision (3G, 4G and HD Voice upgrades) are in place.

12. jove39

Posts: 2146; Member since: Oct 18, 2011

Well...carriers need to stand together against Apple...and ask for price reduction!

14. Jeradiah3

Posts: 1149; Member since: Feb 11, 2010

Sprint is trying to take a page from AT&T and use the iPhone as a way to make themselves a respected company again. this isnt 2007 where the amount smartphone companies were almost nonexistant...............this is 2012 and there are TV companies (Sony and LG) that have their own Smartphones!! Sprint is too little, too late to bank on Apple to bail them out of "the red!" the other 3 major carriers have smartphones that are better than Apple when it comes to screen size, PRICE, specifications, capability, and many others. Sprint may not last till 2015 with the business practices that they're doing

15. taco50

Posts: 5506; Member since: Oct 08, 2009

Those phones are not better when it comes to user satisfaction, return rate, failure rate, customer loyalty and sales. iPhone dominates android

16. Sniggly

Posts: 7305; Member since: Dec 05, 2009

Your first sentence was fairly correct. The second sentence is clearly false. I'd explain why, but you never get it when I do. Slightly better does not equal domination.

33. miles16852

Posts: 241; Member since: Oct 20, 2011

where? in your world maybe!

17. jove39

Posts: 2146; Member since: Oct 18, 2011

May be Sprint will learn it with time...and start promoting Android and Windows Phone like Verizon and ATT have started...to make for some lost traction due to carrying burden of iPhone.

18. jove39

Posts: 2146; Member since: Oct 18, 2011

I just liked writing iPhone a burden...lol

19. taco50

Posts: 5506; Member since: Oct 08, 2009

The problem is customers don't want android or Windows phone

20. Sniggly

Posts: 7305; Member since: Dec 05, 2009

56 percent worldwide market share proves you wrong.

21. remixfa

Posts: 14605; Member since: Dec 19, 2008

yea, except that android has more than double the world wide market share of iOS and growing faster than iOS by a wide margin. Last I looked, iOS was nearly stagnant in Q1, didnt sell as well as Samsung phones, and had about the same growth world wide as BADA.. yup.. thats the ultimate platform alright.

23. taco50

Posts: 5506; Member since: Oct 08, 2009

Customers think so and study after study proves it.

24. Sniggly

Posts: 7305; Member since: Dec 05, 2009

The majority of people also think a government is a great way to organize society. The majority CAN be wrong, you know.

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