Sprint CEO, Dan Hesse, said that iPhone users are “more profitable” on a whole when compared to other subscribers using phones running on other platforms such as the Android OS in an interview with Mobile World Live. The statement was qualified with Hesse noting that iPhone users have a low churn rate and end up using less data on average than other smartphone customers using high-end 4G Android devices. He pointed out that the less bandwidth used by iPhone customers who already have paid for unlimited data plans presumably translates to lower operating costs and therefore higher profit margins.
Hesse continued by saying that “from a cost point of view and a customer lifetime value perspective, [iPhone users] are more profitable than the average smartphone customer.”
This all started with Sprint first announcing its deal with Apple that would allow the company to sell the popular device back in October 2011. At the time, the nation’s third largest carrier was banking on recouping up front costs with subscriber revenue. Before working out the deal with Apple, Hesse was quoted saying that the device was the number one reason why his company was losing customers.
Sprint’s February 10-K report revealed that the company planned to exceed the $15.5 billion minimum purchase agreement with Apple despite a decline in wireless profits which were all due to high subsidy costs. With the iPhone officially launching on Sprint’s network in October with the debut of the iPhone 4S, the carrier managed to sell 1.8 million units over the 2011 holiday quarter alone. Hesse mentioned that “four out of every 10 iPhones” the company sold were for “new customers.” This equated to “roughly double the rate of” Sprint’s competitors, which is exactly what the company was looking for.
Source: Mobile World Live
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