Sprint Nextel

Reports from the Wall Street Journal last October revealed Sprint’s Chief Executive Officer Dan Hesse convinced the company’s board to take on a staggering commitment of approximately $20 billion to purchase 30.5 million iPhones over four years. At the time, Hesse said Sprint “would likely lose money on the deal until 2014. ″ He also claimed not having the iPhone was “the No. 1 reason customers leave or switch.” In an interview with Mobile World Live (via BGR), Hesse defended the decision and claimed, among other things, that iPhone users are “more profitable than the average smartphone customer.”

“ Subsidies are heavy for the iPhone. This is the reason why a high percentage of new customers is important… 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.”

Hesse went on to claim that Sprint was “pulling a lot of customers” from AT&T and Verizon during the fourth quarter by noting four out of every 10 iPhones the carrier sold were new customers. According to Hesse, that is around double the rate of the other carriers.

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United States carrier Sprint, the nation’s third-largest wireless telecommunications network, announced today holiday quarter earnings containing a couple interesting tidbits related to Apple’s iPhone, which helped bring in most of its new customers. Sprint reportedly ponied up $20 billion to land Apple’s iconic smartphone last October, calling the handset launch in today’s statement “successful.”

Forty percent of Sprint’s 1.8 million iPhone sales in the fourth quarter were to new customers. 

This means some 720,000 Sprint iPhones went into the hands of new customers—once again highlighting Apple device’s proven ability to attract new consumers. Sprint only added 539,000 net additions to the postpaid base, so it would likely have lost around 200,000 customers without the iPhone in its lineup.

According to Sprint’s internal estimates, high costs associated with subsidizing the iPhone —combined with the impact of iPhone and Network Vision costs— are to blame for wider than expected short term loss, which reached an astounding $1.3 billion in Q4 2011 and $2.9 billion for 2011. These factors also reduced fourth-quarter adjusted operating income before depreciation and amortization (OIBDA) of $842 million by approximately $684 million.

Reuters reported in October 2011 that Sprint paid about 40 percent higher subsidy to Apple than the industry average, amounting to $200 more per device.

Sprint CEO Dan Hesse has some nice words for Apple’s phone:

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AT&T announced it would introduce new data plans for phones and tablets on Sunday, Jan. 22.  There will be three phone plans: $20 for 300MB, $30 for 3GB, and $50 for 5GB with tethering. While the two tablet plans will be: $30 for 3GB and $50 for 5GB.

In the past, AT&T made available $15 for 200MB, $25 for 2GB, or $45 for 4GB with tethering. Each plan earned more data and a $5 price hike. AT&T will charge $10 for each 1GB roll over. AT&T explained the sudden change:

“Customers are using more data than ever before,” said David Christopher, chief marketing officer, AT&T Mobility and Consumer Markets. “Our new plans are driven by this increasing demand in a highly competitive environment, and continue to deliver a great value to customers, especially as we continue our 4G LTE deployment.”

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Verizon Wireless’ Chief Financial Officer Fran Shammo told attendees at a conference today that Verizon sold a total 4.2 million iPhones during the holiday quarter, according to Bloomberg. Interestingly, the numbers reported by Shammo show that Verizon more than doubled iPhone sales from the previous quarter, where they sold 2 million. This sales hike was likely helped by pent up demand for the iPhone 4S, a cheaper iPhone 4, and the influx of shoppers during the holidays.  Verizon’s previous iPhone sales were said by some to be a disappointment.

Apple’s fiscal Q1 earnings call is coming up on Jan. 24, where we will hear the total number of iPhones sold during the holiday quarter. We will also hear specific numbers from Sprint and AT&T in the coming weeks. Last quarter’s total amount of iPhones sold should blow out any previous quarters with some experts putting estimates as high as 35 million.

From 9to5Toys.com:

RadioShack is offering a $30 discount on all of their AT&T high end smartphones which obviously includes the iPhone 4S and iPhone 4, starting Sunday and running until December 17th. The sale will bring the iPhone 4S 16GB down to $170 0n contract and the iPhone 4 16GB to $70 on contract. Also, if you use Radioshack’s trade-in program you can get the phones for free and even have some extra credit left over. Head over to your local store to take advantage of this sale.

Update: Word on the street is that Target is going to give $25 back on an iPhone purchase. (Thanks commenter)

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If you’re still trying to get your hands on the Sprint iPhone 4S, you’ve now got another outlet. According to internal documents we’ve obtained, RadioShack will be adding Apple’s latest handset to their Sprint lineup this weekend. Some stores should have stock now and many more will be getting it over the coming days. Unfortunately, if you want the 32 or 64 GB models, you may be out of luck, at least for now. According the documents we’ve seen, there is no indication that those models will be available at this time at Radio Shack.

The 16 GB model will be available in both black and white, and will be available at all stores that currently carry the iPhone, and stores that don’t typically carry the iPhone should be able to order it in. RadioShack has carried the iPhone 4 on Sprint since they started selling the 4S on Verizon and AT&T last month with a note that the Sprint 4S would be available at a later date, due to inventory issues.

[youtube=http://www.youtube.com/watch?v=3bkeXPZhxBk]

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[youtube=http://www.youtube.com/watch?v=yBk_iHJU4tM]

Verizon isn’t just selling Droids these days, they are still making an effort to sell some iPhones on their talk network reputation. AT&T has seen much less churn than was expected when it lost its exclusivity. We hope to see more entertaining back and forth as we ease into the holidays.

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In addition to the big three (AT&T, Verizon Wireless and Sprint) as well as regional carrier C Spire which has begun selling iPhone 4S today, Apple’s new handset is now available from Claro Puerto Rico, the largest Puerto Rican telecommunications services company. The  Guaynabo, Puerto Rico-headquartered wireless operator hosts a million US customers in Puerto Rico (yes, it is a U.S. territory, U.S. dollars, U.S. citizenry) which makes it slightly bigger than C-Spire by subscribers.

Claro is the largest mobile phone network in the Americas. It is part of the Mexican telecom group América Móvil which is one of the four largest mobile phone network operators in the world, with more than 200 million customers.

What’s interesting about their offering is that Claro will be offering the 16GB iPhone 4S for just $99.99 with a standard two-year contact, quite possibly the lowest subsidized price in the United States. The 16GB/32GB version is a $199/$299 value with a two-year contract. Customers can choose between four plans costing $64.98, $74.98, $79.98 and $84.98 a month. All plans include unlimited minutes and text messages and 250MB/2GB/5GB/unlimited data.

They are also offering no-contract iPhone 4S for $669.99/$769.99/$869.99 for the 16/32/64GB version, which is a $20 premium from Apple’s online store, which began accepting orders for the unlocked iPhone 4S this morning. Claro is offering both the 16GB iPhone 4S subsidized and non-subsidized beginning today, with 32GB and 64GB capacities “coming soon”.

Claro is also offering the 8GB iPhone 4 for $49.99 ($569.99 contract-free).

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According to Localytics, AT&T continues to be the dominant iPhone carrier in the US, even with the Verizon entering the market strongly last year, grabbing 40% of the users in half the time.

As the 4S was launched on Sprint as well with truly unlimited data plans, one would have thought more of AT&T’s marketshare would have been diminished.  However, it appears that sprint is taking more away from Verizon.

Sprint’s share of the 4S market now stands at 12% according to the figures.  AT&T, though coverage is spotty in urban areas like New York and San Francisco, does have a significant speed advantage over Sprint and Verizon’s 3G as well as the ability to talk and use data at the same time.

Looking at iPhone 4 distribution as a comparison, Sprint seems to have eroded more of Verizon’s market share than AT&T’s – of the previous-generation handset, 60% are on AT&T versus 40% on Verizon.

A likely driver for these differences is the fact that AT&T can mine its existing base of iPhone users. Because all Verizon iPhone users are in the first year of their wireless contract, the cost of upgrading will be high. However, many longer-term AT&T users, especially those holding iPhone 3GS and earlier devices, are off-contract or nearing the end of their contract. AT&T has been aggressively leveraging the iPhone 4S to sign these customers to new two-year contracts, and the data in this study suggests that tactic may be working.

That data strongly lines up with our poll which we’ve been tracking since before the iPhone 4S launch…

[youtube=http://www.youtube.com/watch?v=wPuYWwBDHHQ]
AT&T just issued a press release saying they activated one million iPhone 4S units, or one-quarter of the four million devices Apple sold during the launch weekend. It’s the most successful launch in AT&T’s history, the company wrote in the release:

AT&T today announced it activated more than 1 million iPhone 4S’ as of Tuesday, making it the most successful iPhone launch in the company’s history. AT&T was the first carrier in the world to launch iPhone in 2007 and is the only U.S. carrier to support iPhone 4S with 4G speeds. “It’s no surprise that customers are clamoring for iPhone 4S and they want it to run on a network that lets them download twice as fast as competitors’,” said Ralph de la Vega, President and CEO, AT&T Mobility & Consumer Markets. AT&T’s speed advantage, and the unique ability to talk and surf at the same time, has been roundly praised by industry pundits.

About those “4G speeds”…

AT&T is reportedly pushing Apple to put a “4G” cellular icon on iPhone 4S to represent its faster Internet connection, which theoretically hits 3G HSPA 14.4 Mbps speeds (lawmakers wouldn’t approve of that). The carrier also released a customer testimonial video, included above, with people explaining why they opted for an iPhone 4S on the AT&T network (hint: because it’s “super-fast”).

Taking into account September quarter earnings, iPhone 4S sales in just a few days since last Friday’s launch hit nearly one-third of the 2.7 million iPhones activated in the last quarter which was down from the 3.2 million iPhones from the year ago September 2010 quarter (which included the iPhone 4 launch).

Note that this is one million iPhone 4Ss only, excluding the newly price-reduced iPhone 4 and iPhone 3GS units.

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Shawn Blanc (via The Next Web) calculated this morning that Apple is selling 16 iPhone 4Ss a second, or roughly 1,000 a minute. Blanc’s figuring comes after Apple announced this morning that there were 4 million iPhone 4Ss sold its opening three-day weekend. Figures are also expected to expand as the iPhone 4S is introduced in 22 more countries on the 24th.

Reaching this milestone, Apple is on tract to pass Microsoft’s Kinect as the fastest selling consumer device of all time. Microsoft sold 8 million Kinects in the first 60 days, a number Apple could theoretically pass in the first two weeks.

The success of the iPhone 4S is most likely helped by a few factors:

1. The availability on three U.S. carriers: AT&T, Verizon, and Sprint. AT&T and Sprint both announced opening day sales records on Friday. The iPhone 4 was only on AT&T in the US its opening day.
2. iPhone 4 was released in 5 countries. iPhone 4S was also available in Canada and Australia in addition.
3. iPhone 4 saw serious product shortages while it appears that Apple made plenty of iPhone 4Ss (OK, maybe not)
4. There was a longer than normal wait time between the iPhone 4 and 4S (15 months)
5. iPhone 4S is amazing.

We’re sure to hear more in Apple’s FYQ4 earnings call tomorrow afternoon.

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[youtube http://www.youtube.com/watch?v=wd7taHnHzcg]

If you’re trying to make your iPhone 4S buying decision based on network speeds, here’s a helpful comparison video (above). The test shows the loading of websites and also runs the speed test application on all three networks.

Remember, this was done at one fixed location so you’re mileage most certainly will vary.

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Sprint took a big risk on the iPhone, paying a rumored $20B up front to get the iPhone over the next four years (that is some pipeline!).

Mr. Hesse told the board the carrier would have to agree to purchase at least 30.5 million iPhones over the next four years—a commitment of $20 billion at current rates—whether or not it could find people to buy them, according to people familiar with the matter. In order to keep the price people pay for the phone low and competitive with rivals, Sprint would be subsidizing the cost of each phone to the tune of about $500, which would take a long time to recoup even at the high monthly fees iPhone users pay.

Directors debated what they had just heard. Some worried the payoff would be too long in coming. One member questioned whether the multiyear deal might outlast the iPhone’s popularity. To sell that many iPhones, Sprint would have to double its rolls of contract customers, convert all of them to the Apple device or a combination of the two.

It appears that the risk is already starting to pay off.

Today, spokeswoman Michelle Mermelstein told us:

Fared Adib, Sprint Product Chief, issued the following statement: “Sprint today reported its best ever day of sales in retail, web and telesales for a device family in Sprint history with the launch of iPhone 4S and iPhone 4. We reached this milestone at approximately noon CT/1pm ET. The response to this device by current and new customers has surpassed our expectations and validates our customers’ desire for a truly unlimited data pricing plan.”

Unlimited is a good thing.

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Readers are writing in to tell us that AT&T is backlogged on their iPhone activations while Verizon and Sprint appear to be handling the load a little better.

One reason is likely sheer numbers. Our survey (below) shows that US users are picking AT&T over Verizon and Sprint by a significant margin (mostly for the Data speed). We’ve also heard that Apple was expecting this and stocking up to five times as many AT&T iPhone 4Ss as Sprint or Verizon iPhones.

So which iPhone did you pick up?

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The iPhone 4S has sold out completely across AT&T, Verizon, and Sprint reports Businessweek. While you can still get your order in, delivery in AT&T’s case has been pushed back 3 -4 weeks. Shipping should be similar for Verizon and Sprint too, but they aren’t providing a time frame on their website.

Apple announced it had sold 1 million iPhone 4Ss across 100 world carriers in 24 hours in contrast with 600,000 across the five launch countries in 2010 with the iPhone 4.

Tomorrow the iPhone 4S goes on sale, and stores should have an extra stock of the iPhone 4S for those who haven’t pre-ordered yet. To get your hands on those, you’ll probably have to hop in line pretty early. 
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Owning up to its ‘Worldphone’ capabilities, Macworld got the SIM unlock policies from Verizon and Sprint which may make the CDMA phone more attractive than one from AT&T that is SIM-locked.

But there’s a new wrinkle that potentially makes the international-roaming experience better on Sprint and Verizon iPhones than it is on AT&T. Sprint plans to sell the iPhone 4S with its micro-SIM slot unlocked; Verizon’s will be initially locked, but if you’ve been a customer in good standing for 60 days, you can call Verizon and ask for an “international unlock.” (A Verizon spokesperson told me that this is Verizon’s standard policy for all world phones—it’s just the first time it’s manifested itself on an iPhone.)

That’s interesting because for instance the Verizon Droid II Worldphone comes with a locked Vodafone (Verizon’s half parent company) SIM card. If you travel overseas you cannot exchange a local carrier’s SIM, you have to use Vodafone. Verizon may unlock these but it was my understanding that it was up to their discretion. Their policy might be two months old now but that could change on a whim (plus, what is “good standing” – seems shady).

AT&T of course won’t let you put in a local carrier’s SIM card and will charge you their high rates for roaming (though they’ve come down a bit over the past year).

When added to Sprint’s unlimited data plans, ol’ Yellow is looking pretty good, especially for those who travel internationally.

Update: Sprint refuted this claim to Ars Technica and says you will get a Sprint SIM and be charged Sprint Roaming charges, like AT&T.

Ah, to be European with an overzealous package fulfillment service (DHL). Deliveries have already started including one of many Macerkopf readers:

Update: In an email, iPhone Italia said they ‘disassembled’ the iPhone 4S but from the site, it appears only to be spare parts.

iPhoneitalia has taken it upon themselves to compare iPhone 4S parts with the iPhone 4.

In the old camera was attached to the solenoid lenses and the whole group moved to focus the image, in this new camera is outside the solenoid, and moves only slowly, so we think this is also an effect on the improved shooting speed. The CCD is unchanged in size.

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Here’s the initial observations (machine translated):

The ‘Touch LCD and have remained virtually unchanged, the only differences are:

1) screw placement, which is changed according to the new shell with antenna diversity;
2) the patina around the proximity sensor is now placed in a slightly different way, to solve definitely the problem with the sensor that some users complain. Also now more visible is the area of ​​the light sensor, presumably to make it more sensitive.

As for the back of iPhone 4S:

Slightly bigger battery (5.25 -> 5.3 Whr or 1420 mAh or 1430 mAh) detailled below:

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Perhaps looking to differentiate its service from the other two US carriers, AT&T is working with Apple to get a “4G” icon on the iPhone 4S when it hits its HSPA+ network according to The Verge.

The move would seem to try to further differentiate AT&T’s network which is already significantly faster than Sprint or Verizon’s (and theoretically double the iPhone 4 speed).

If you are in the US, which network will you be getting an iPhone 4S on?

We are hearing numerous reports that AT&T unlimited data users aren’t able to upgrade their unlimited plans when they order the iPhone 4S. They are automatically changed to a different data tier (in the above case, the $30 data).

Update: It appears the upgrade is just a bit more complicated. You have to remove the “unlimited data for iphone” plan and then they’ll let you add an “unlimited data for iphone 4S” plan. Yes, unnecessarily complicated and is causing some users to lose their unlimited status.

Update 2: AT&T has chimed in: All current AT&T smartphone customers with an unlimited plan can upgrade and keep their unlimited plan. We’re working on making the online page more clear, but if a customer keeps clicking continue, they will see their unlimited plan.

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It’s interesting that you can’t take your unlocked iPhone 4S over to Sprint or Verizon to enable service, at least explicitly. Also, it appears that you can take your unlocked iPhone 4S over to T-Mobile (Apple says “GSM Networks” but doesn’t mention T-Mobile specifically), but only expect to use the EDGE 2G speeds.  Being unlocked also means swapping out micro SIMs when travelling internationally is possible.

The unlocked iPhone includes all the features of iPhone but without a contract commitment. You can activate and use it on the supported GSM wireless network of your choice, such as AT&T in the United States.* The unlocked iPhone 4 or iPhone 4S will not work with CDMA-based carriers such as Verizon Wireless or Sprint.

If you don’t want a multiyear service contract or if you prefer to use a local carrier when traveling abroad, the unlocked iPhone is the best choice. It arrives without a micro-SIM card, so you’ll need an active micro-SIM card from any supported GSM carrier worldwide. To start using it, simply insert the micro-SIM card into the slot on your iPhone and turn it on by pressing and holding the On/Off button for a few seconds. Then follow the onscreen instructions to set up your iPhone.

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This is from a new source. The results aren’t surprising so we’re posting here. We’re thinking these are going to be available sooner rather than later after the announcement.
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