Sprint (S) feels the heat from iPhone (AAPL)

Posted Aug 20th 2007 11:15AM by Brian White
Filed under: Competitive Strategy, AT and T (T), Sprint Nextel Corp (S), Verizon Communications (VZ)

Although Sprint Nextel Corp. (NYSE: S) CEO Gary Forsee downplayed the impact of the Apple, Inc. (NASDAQ: AAPL) iPhone during the recent release of the company's latest quarterly results, he's shifted his wording a bit now and says that competition from the all-in-one device, along with general economic conditions, could hamper the ability of Sprint to gain new customers in the near future.

Although Sprint is selling wireless handsets like the Samsung UpStage and the LG Muziq to complete with the iPhone, neither sync with Apple's iTunes software -- which is a biggie. Although Sprint has over 100,000 downloadable songs priced at an Apple-esque $0.99 and can beam these purchases right to handsets over the air (no PC required), the iPod/iPhone/iTunes ecosystem Apple has built is one formidable competitor.

While adding only 16,000 post-paid customers in its most recent quarter -- as compared to the millions added by the competition -- Sprint management is probably feeling the heat from investors. How is it going to grow and what is the strategy being undertaken? Forsee stated that "We know we have to produce in order to have investor confidence in the future . . . that's certainly what we intend to do as a company and what I intend to do as chief executive." He has probably two or three more quarters to prove those words beyond a shadow of a doubt or he could be gone. Although Sprint provides fine services, competing with larger rivals AT&T, Inc. (NYSE: T) and Verizon Communications, Inc. (NYSE: VZ) is proving harder each quarter that goes by.

Tags: AAPL, inthenews, iPhone, S, Sprint Nextel, SprintEarnings, SprintNextel, T, VZ

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Reader Comments (Page 1 of 1)

8-20-2007 @ 7:15PM

Neil Anderson said...

Yikes. Wouldn't want to be Sprint right about now. And guess what? With the iPhone, competition is only going to get tougher.

8-21-2007 @ 12:08PM

Blogging in Alternate Reality? said...

Puh-leeze! I think you're going WAY out on a limb here to suggest that Apple and its overhyped iPhone are responsible for any troubles Sprint might be experiencing. I've noticed this blog tends to drink heavily of the Apple Kool-Aid, but to suggest that the lack of a phone that can sync with iTunes is somehow a "biggie" that's costing Sprint "millions of customers" is just silly. If it were true, then other wireless providers would be having the same problem, not just Sprint - since as far as I know, the only phone that syncs with iTunes is the iPhone (and that Motorola one that didn't do so well). I'm actually in the market for a new smartphone, but the iPhone isn't on my list. Why? Got time for a full list? First, and perhaps most importantly, it's overpriced. The EDGE network is slow. It doesn't do instant messaging. No video recording. The camera needs very stationary subjects to get good photos. I need more storage than 8GB for my MP3s, so it's useless as a music player for me. It doesn't support voice dialing. No custom ringtones. Its email support is weak. Mobile Safari doesn't work on several of my favorite web sites (and other mobile browsers do). The battery isn't user-swappable or replaceable, a feature that's been part of most cell phones from day one. It's not very stable. It can't sync over a wireless connection, only USB. It doesn't include GPS capabilities, something almost every new phone offers nowadays. If the display locks up, you can't answer a call. It needs iTunes to sync, and personally I refuse to use iTunes. Then there's that display. Do a little research and you'll learn its inventor, a Finnish company, went bankrupt trying to produce one that didn't go bad after a few months of use... and people are already reporting dead spots in their iPhone displays. The iPhone isn't revolutionizing the cellular phone industry. Waking it up a little, maybe... Maybe. But it's not the be-all and end-all of wireless phones any more than the Macintosh is the be-all and end-all of computing.

8-23-2007 @ 12:55PM

Lance Edmund Hood said...

Well I have been with Sprint since 1997, and through the years have thought about leaving them. My current issue is they have the CDMA/IDEN "hybrid" phones, well try to buy one. It is crazy, oh you will have to open a seperate account, you cant have that phone with this phone. I would like to tell them that is not the customers issue, the oh you are on P2K you need to convert you account to ONSEMBLE. Oh and your going to have to change your rate plan...WHAT? all I want is to buy a phone that is a SPRINT phone NOT A NEXTEL.

When you make it easier to buy a car than to get a cell phone its no wonder you loose customers!

Also you can call get told 5 different things by 3 different people. They will transfer you to the moon and back and if you tell the person on the other end of the line I can barely hear you please speak up they will just hang up on you. If you call for a problem they try to get you to buy a connection card or add a line when your calling for a problem, I always tell them how bought we fix my current problem before we add a new one.

They need to realise that they have to go a step further to keep the customers, not sit back and think we are captive, ever since they made it where you could take your number with you the rules have changed.

They need to say hey we are loosing customers who have been with for years....why? Now that you can readly buy a unlocked GSM phone they need to say hey people will change companys at the drop of a hat and go to the ones with the best service and one where you are person not a number that you harvest money from each month.

Thats also reminds me of them dropping customers who complained too much (sure they did dozens of calls each day, but was anyone keeping track of the complaints so that problems could be realised and not hid?).