Sprint CFO: 'Pre didn't work out as well as we hoped'
By Chris Ziegler 
posted May 18th 2010 4:26PM
posted May 18th 2010 4:26PM
The worst of Palm's fears may be over now that HP has played the knight-in-shining-armor role, but Sprint -- the States' number three carrier -- still has a ways to go before it can claim it's out of the woods, having gone a solid string of fiscal quarters now without posting a profit or a net gain in subscribers. Of course, this is the kind of situation that puts dudes with the word "financial" in their titles on the hot seat, and sure enough, Sprint CFO Robert Brust came out swinging at an investor conference this week. Brust points to narrowing losses and an expanding prepaid presence as reasons he thinks the company can grow revenue by year-end, not to mention an expanding 4G footprint and -- on a closely related note -- the imminent release of the EVO 4G. Showing a bit of humility, he also said that the company has "learned a lot" since the launch of the Pre, acknowledging that the phone "didn't work out as well as [they] hoped." In other words: we wouldn't expect any more crazy two-phone exclusive deals with Palm lasting the better part of a year any time soon.
You think?
Note to Engadget: Remove that AirWick advert that won't shut-up, it's quite annoying.
Definitely. Duh!
@kapanak
I hope they actually learned how to advertise this time.
@Luxury Guy They have HP. They can probably do something similar to the new Rhys Darby adverts. He's pretty funny (and annoying =P)
LOL @ Pre
@Luxury Guy
That's all it ever was. Good advertising.= improved product recognition.
@kapanak
i think that palm oughta send their manufacturing through htc... i mean, seriously, what was the last htc phone you had that had crappy build quality?
@kapanak
Sprint, you were supposed to bet on Duke, not Palm.
They need to hire whoever is doing the DROID ad campaign, best one I have seen in a long time.
@treats
Did you see the new ad for Incredible...absolutely amazing for an Ad...they are doing something right...
The Pre was doomed in July 2008.
What Brust isn't telling you is the massive fuck up Sprint had with the Instinct. They spent $100 million in advertising on it, billing it as an iPhone killer (remember the "Sprint Wins!" commercials?). But while they set records for phone sales, they also set records for returns after people figured out the Instinct was NOT on the same level as iPhone. Fast forward one year to the Pre, where everyone who wanted the iPhone were locked into contracts and were burned by Sprint from the previous year. Palm didn't help with what is probably the absolute worst advertising campaign for a mobile device in the entire history of ever. Even Sprint's awesome advertising couldn't save it.
@kapanak
The Latest Ad here: Verizon DROID INCREDIBLE by HTC - Fast
http://www.youtube.com/watch?v=kdC23HKa5bc&feature=player_embedded
First one: http://www.youtube.com/watch?v=S-Gesai5WlE
@Beatnik
whoa, I actually had not seen the original for incredible...
@Luxury Guy
If you read the interview, Brust states the lack of available handsets at launch as his main reason for the Pre not working out as well as possible, not poor advertising.
@Spaceshipped And you believed them...
Palm's fiscal reports don't lie. Their sell through wasn't great. And now it's evident why. Sprint and Verizon both sat on their ass promoting the phones.
Hope Palm learns that CDMA is not the way to go next time round.
@sweet greggo
It goes to show,
Sprint doesn't know how to execute, though with the best phone lineup,
VZW has their s*it together,
AT&T is resting on Apple's laurels.. and Luck.
T-mobile is the underdog and will always be unless they roll out 21mbps HSPDA+ to all major cities... today.
Man, I hope the Evo 4G doesn't go down the same route.
@kapanak
Note to Robert Brust:
No Shit.
@N900 maybe palm can borrow Dr. Dre for a commercial or two
@Wildman My Dash.
@kapanak Sour graping is common in this world, I didn't know its common on CEO's as well. http://j.mp/hp-palm-duality
It's actually the other way around. It was Sprint that was bad for Palm.
Hopefully Palm won't make the same mistake again and choose Sprint as the exclusive carrier for their next device.
Should've fired the advertising agency from the beginning.
@ViperVin
I feel like the real killer was timing. Everyone was talking about the Pre for months and months before it finally released. If it had been released 3-4 months earlier (like, near the time Josh showed one off on Jimmy Fallon) more people would have gone WebOS over Android. They just let Android get too much steam going before they released their flagship.
@ViperVin
Sprint didn't have the creepy girl ads, that was all Palm. Sprint's advertising is currently the best of all carriers imo.
@sweet greggo
I don't think she was THAT creepy.
(The nightmares are gone...)
Eh, Verizon's anti-AT&T ads are the best of all the carriers. Especially when they got creative with the Island of Misfit Phones.
In other obvious news, sun warm, sky blue, people are excited for the Evo.
@Hussain Rahim
The sky is black here in Vancouver...well, light black...possibly navy blue...ok it is blue...
I wish EVO was launched on HSPA+ networks in Canada...
@kapanak Agreed..... I would settle for even a small selection of decent smatphones north of the 49th. Evo...incredible.....nexus one....
Why do we seem to get the shaft on new phones, I mean we have a larger per capital income for crying out loud!! I'm afraid the htc magic, xperia x10 and the like just ain't cuttin it for me....
@kapanak
not a chance. Canada never gets good Android phones.
@jellotime91
Well, Nexus One is available for ordering...but nearly $600 is unjustifiable...and Canada gets three year contracts...seriously, the government should make that illegal...
I want good Android phones... :'(
@Impedance
yeah but by the time you pay taxes I bet your net income is less. Just speculation but I hear canada tax is crazy high
@jj91709
Sales tax is high, but actual income tax is slightly lower than US, and we don't get taxed on gifts and lottery wins...
@Hussain Rahim Count me in on the "waiting for the EVO 4G" line.
WebOS = Awesome and still my favorite mobile OS
Palm Pre = Pile of garbage.
My wife's got returned the first week (stopped powering up) and a year later mine randomly doesn't power on the screen, the top wobbles freely, the USB door fell out and did I mention the screen doesn't always work?
I honestly don't know why Sprint is always losing money. I came over from T-mobile, & heard all the complaints about Sprint's customer service, but in the 3+ year's I've been with them, I haven't had any need to call customer service. Their service is excellent (~5-10 dropped calls in 3+ years), their prices are unbeatable, and during the last year you can clearly tell they've been working on improving their customer service (though I never found a problem with is).
@thaprinze
Sprint CS is OK. I've been with them now for 3 years. My experience has been inconsistent. You call asking a question and get one response. Call back and you get a totally different response. Poor training or poor communication lead to a lot of customer frustration and operational inefficiency on Sprint's part.
The other big screw up is around SERO. Sprint can't decide if SERO customers are profitable. To that end they have a crazy policy about SERO users and what phones they can get. Blocking the Pre was a huge mistake. As will blocking the EVO.
Look, I get that SERO customers are not as profitable as regular customers. I get that there might be a shortage of devices at launch. I get that you want to have some incentive for SERO customers to switch over to Simply Everything. All that said, blocking SERO customers from Android and Palm (and most likely WP7) is idiotic. Put a policy in place that prevents SERO customers from upgrading to certain phones during the initial 6-12 month window. After that, customer should be able to buy any device. Sprint should be thrilled to sell any Pre's they can right now. The hardware is a year old, costs $149 (after $100 rebate) and is fading quickly. It's absurd that SERO customers still can't buy that phone.
@thaprinze They've gotten better, but still have the reputation.
They're not even that great now, though. I've tried 3 different Sprint stores, and all of them insist I change my plan before they can help me with a dysfunctional phone because I had the Everything Plus Referral Plan and they can't activate a phone instore with that. So then I had to go back online, to Sprint chat, have them switch it back, and be charged some weird fees for it.
No thank you. This company is a joke.
@thaprinze - "I honestly don't know why Sprint is always losing money." 3 Words - CDMA, SUX, AZZ!
If Sprint was GSM they would be giving AT&T and T-MO hart-burn (i.e. churn, take your phone to sprint, including the fruit phone, pop in the "Sprint SIM and ROLL), not to mention all of that CA$H that they (AT&T and T-MO) rake in with GSM roamers from overseas on the US domestic network. And their making the same mistake all over again with WiMax instead of LTE.
Fast forward a year from now - "Sprint CFO: The EVO didn't work out as well as we hoped".
Sayin...
@Frankenstein Black If CDMA sucks, then why are the #1 and $3 carriers in the U.S. using it? Don't push around false info, because of in terms of technology, CDMA has more advantages over GSM.
@ViperVin
I always tried to find a understandable comparison between CDMA2000 and UMTS, but I couldn't find one. What are the real pros and cons of both standards. You know a link?
@ViperVin and HSPA/+ has more advantages over CDMA....which is ohh that's right, GSM's 3g successor. (referring to network standards here).
Well I'm glad I can be a part of the crew helping to turn the numbers around. Evo here I come!
A device like the Pre really needed to be on a GSM carrier because Sprint had nothing really going for them but now they have 4G which I think will make the EVO 4G turn out better. Plus they need to work on advertising.
O rly?
@chuck67 Ya rly!
@chuck67
Where is the Owl...?
@kapanak
http://www.johnfatica.com/o_rly.jpg
price the evo 4g a bit better (like removing the $10 'fee' for those without 4g access) and ensure success.
@askmenyc
Agreed. They need customers, and have the one of the hottest phones this year. Then what do they do? They hike the price. Good way to get more customers. Sure some will go, and many others wont.