Sprint CEO Defends Company's Decision To Bet It All On the iPhone 187
zacharye writes "Sprint chief executive Dan Hesse is being watched closely by the company's board of directors, but the CEO has to answer to investors and subscribers as well. Last year in October, Hesse revealed that the company is placing a massive $15.5 billion bet on Apple's iPhone, and in a recent interview, Hesse defended the move, which has been criticized by a number of industry watchers. From the article: '“Subsidies are heavy for the iPhone. This is the reason why a high percentage of new customers is important,” Hesse said during the interview. “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.”'"
Apple Customers (Score:3, Insightful)
They pay more and use less? What a shocker! Who would have thought?
Re:Apple Customers (Score:5, Insightful)
They pay more and use less? What a shocker! Who would have thought?
Steve Jobs.
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Exactly, that is how most companies made it good.
Re:Apple Customers (Score:5, Funny)
Re:Apple Customers (Score:4, Informative)
Re:Apple Customers (Score:4, Interesting)
Android has voice dictation too hasn't it ? Plus it has to serve up all those mobile ads, so it might still use more data though not to the user's benefit [bbc.co.uk].
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Well, since I switched to a Galaxy, my background data transfer has about doubled over my previous phone (a Shine Plus). Since I barely use any data at all, and none of my apps serve up ads, that extra transfer has to come from somewhere.
I'm actually conducting an experiment this week, to see if my usage goes down when I stop using voice dictation.
That being said, we're talking about a difference of only a few hundred kilobytes per day... I'm still not even close to exceeding my monthly cap, which is itself
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Yes, but AFAIK Android's voice dictation is done on the phone
No, it isn't. It's done in the cloud. If you don't have data service, voice dictation doesn't work.
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Google doesn't serve in-app ads to third party apps. There are other companies that do, but Google doesn't. Most in-app advertising does not generate any revenue for Google at all, they make money from the sale of apps and by driving people to their other services. It is similar to the way Google search works - the banner ads on linked web sites usually don't make money for Google.
Re:Apple Customers (Score:4, Informative)
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Plus it has to serve up all those mobile ads
You write as if the iPhone is immune to advertising. It isn't. When It Comes to Mobile Advertising, iPhone Still the Biggest Target [allthingsd.com] Average iAd size has been estimated at 5MB: [tumblr.com] "Assuming 5MB per iAd, this means that, under AT&T’s new data plan, the user has to pay to watch an ad. Either 40 cents or 6 cents depending on the package."
so it might still use more data though not to the user's benefit
That study didn't include iPhone, but obviously iPhone apps with adverts are also going to consume more energy.
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Firstly the article you linked is about ads served in the browser, I was talking about ad-supported apps. On Android apps are (I understand) predominantly ad-supported, while on iOS they are the exception rather than the rule. As to iAd, it's just not so popular when compared to competing sevices like Admob. Its ads do tend to be bigger (the few I've seen focus on video, like traditional tv ads) but I'd be very surprised if Apple wasn't caching these and downloading them in advance while connected to WiFi o
Re:Apple Customers (Score:4, Interesting)
I have a 4S and use the same amount of data as I did with my 3G, which isn't much at all. Less than a gig per month.
I do use Siri as well, mostly when driving.
Re:Apple Customers (Score:5, Informative)
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Why would you factor out the iPad when comparing iOS to Android?
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But the comment wasn't.
Please try to pay attention. We may discuss different things concurrently. That's ok, we can handle it.
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Maybe they use less data because iPhone apps aren't constantly uploading their gps coordinates and downloading ads. If you look at mobile web traffic, iOS beats android. Even when you factor out the iPad.
Which in turn goes to GP's comment that iPhone customers pay more -- in this case, they pay more for apps. Any user that switches (in either direction) can attest to the fact that many apps in Appstore are paid where their Android Market equivalent would be ad-supported.
That in turn goes to developer interest [huffingtonpost.com] in the iPhone over Android.
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Any user that switches (in either direction) can attest to the fact that many apps in Appstore are paid where their Android Market equivalent would be ad-supported.
Or simply not exist under Android.
To imply that a particular app is "paid" under iOS and "ad supported" under Android seems misleading. I suppose you are using the term "equivalent" very loosely. If so I think your point may still be misleading. For any given paid app under iOS you will most likely find "equivalent" ad supported apps also under iOS.
This is bullshit. (Score:5, Insightful)
If you wany an apples to apples comparison, you should, at the very least, compare mobile web traffic from iOS to mobile web traffic from high-end 4G Android device - which is what the CEO was talking. And no one seems to ever announce this sort of data.
Stop with the fanboism. Seriously.
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iPhones aren't 4G though... so it's not Apples to apples.
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It is a bit surprising. (But so too was the stat that the number of iPhone users (UK) in debt are about double that of Android users.) Maybe these persons don't buy the phone for actual use, but for the same reason I spent money on a watch that I didn't need -- it looks good on my wrist.
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Maybe Android users aren't in debt because they don't spend much money on dating.
What?
Re:Apple Customers (Score:5, Insightful)
Women don't fiind endless babble about how terrible the iPhone is to be a turn on.
That's odd: most Android people I know (myself included) don't waste much time in conversation discussing phones, especially with members of the opposite sex, much less something such as the iPhone that we simply could not care less about. It's iUser arrogance to believe that all of us Android users care about the iPhone, feel threatened by it in some way. We don't, and we look down at people who so willingly allow themselves to be technologically shackled. But hey, to each their own.
Matter of established fact, it's the Apple crowd that has always been by far the most vocal. I've been in this business for a long time, before there was an Apple ][. And, since the advent of the Mac, and Jobs' deliberate efforts to encourage class envy to increase sales, it's always been the Apple people that are constantly deriding those using competing products. In the old days, tell a Mac user that his machine is limited because it didn't have any peripheral slots and he would say, "Why would you need them?" Today, ask an iPhone user why his phone won't support tethering, why it is limited to a single GUI, why it won't allow installation of non-Market apps, and he'll say, "Why would you want to do that?" Nothing changes but their underwear, I guess.
I dislike Apple intensely because at one point (decades ago) I made my living coding for Apple systems, and Apple truly was about freedom, openness, and the spirit of the personal computing revolution. Granted, that was Wozniak's influence: Jobs always was a dick. But today they pay lip service to freedom while doing their level best to turn you into a mere consumer of paid media, bought solely from Apple. No thanks.
Re:Apple Customers (Score:5, Insightful)
That was a very long rebuttal to a criticism of Android fans who endlessly babble about how they hate Apple.
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But at least it was spot-on.
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He's very good at convincing us that he couldn't care less about people who use different phones.
Re:Apple Customers (Score:5, Interesting)
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Wow, just wow.
First you mention iUser arrogance, then in the next sentence mention looking down on those (presumably iPhone owners) who let themselves be technologically shackled??
if an iPhone owner wrote the same thing about androids, they'd be modded down and called an elitist fanboy. But apparently it's okay to be an elitist android owner and ironically mock iPhone user elitism.
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>>> it's always been the Apple people that are constantly deriding those using competing products.
Which was funny because back in the 80s it was always the Atari and Commodore computers that were most advanced in technology. Apple Macs were a boring black-and-white, and IBM PCs had a measly 4 or 16 colors with sound that was worse than a touchtone phone. Plus they were outrageously expensive. ($500 for an ST or Amiga versus ~$3000 for a Mac or PC.)
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You are doing it the wrong way...
Find a girl in a bar with an iphone in your target group.
Strike up a conversation and ask how to do some things on the iPhone (like deleting an app you don't want).
---
These days I have an android and an blackberry (because my iphone 3 plunged to it's death). I have an android because the insurance plan for iphones was onerous (essentially "you break it, you bought it plus you give us $100").
But my next work phone will be an iphone... in july. Til then, blackberry with a ba
Re:Apple Customers (Score:5, Interesting)
They pay more and use less? What a shocker! Who would have thought?
It's not even that. What he's saying is that 4G Android users use more data than iPhone (i.e. 3G) users do (shocking!) since iPhone is currently still 3G/"3.5"G, and the Android users are more likely to demand the newest gadgets (i.e. "higher churn"). Which is naturally worse for the phone company who wants you to buy whatever phone, keep it forever, and never use the speed you're paying for while still continuing to pay for it.
The problem is that newer, 4G iPhones are likely to attract exactly the same crowd. So unless Sprint's new business model is to keep selling obsolete iPhones forever, they had probably better get a new plan.
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plan? do you think a company that thinks that in order to get iphones it had to commit to 15 billion(!!!!!!!!!) worth of purchases has a _plan_ ? fuck no. they have no business model. their business model for this period is "let's dump 15 billion on apple! they'll make us rich!! YEEHAAAAA!!!". they don't know what they're buying and what they're buying they could have bought anyhow.
the reasoning for why it's smart to bet 15 billion on iphone just came afterwards, like implying that iphone users like to pay
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They pay more and use less? What a shocker! Who would have thought?
You are correct. Apple customer are probably not using as much bandwidth. They are probably less likely to watch YouTube videos of kids in squirrel costumes dancing.
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Can someone explain to me why the parent comment is modded "troll"? No, never mind; any time anyone says anything negative about any damned company, no matter how truthful and even insightful the comment, some stupid little fanboy will call it a troll.
I agree with the parent, at least on the "price" part, which is indisputable; Apple gear is high priced. Price is the single reason I have no iThings. As to the "use less", my daughter has one computing device, her iPhone, while I'll be listening to the radio
Re:Slashdot trolls (Score:4, Insightful)
A contrived negative Apple comment. Who would have thought?
Dude, the GP just defined Apple's entire business model. Seriously, that's it in a nutshell.
Furthermore, like it or not, Apple is deserving of much approbation, far more than they get on this site.
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Comment removed (Score:5, Insightful)
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You have some points, but, at the end of the day, it comes down to performance. For me, anyway.
I'm the kind of guy who is fine riding around on an old, rusty 10-speed, instead of a tricked out high-end carbon-fiber bike. I also don't indulge in expensive riding apparel; I have proper cycling shoes - energy transfer benefit - but a shirt is pretty much a shirt. I drive a modest car instead of a high-end Audi, Beemer, Mercedes, etc. I have a modest house rather than a McMansion.
My laptop is a MacBook Pro
iPhone users (Score:5, Funny)
They are also more attractive and have great personalities
Re:iPhone users (Score:4, Informative)
You forgot richer and better educated [splatf.com]. Oh and more sexually active [wired.com], that probably explains why there seem to be so many Android users on Slashdot.
Re:iPhone users (Score:4, Funny)
...more sexually active...
That's why the corners are round.
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I should by an iPhone then. I will get more chicks, for sure!
Re:iPhone users (Score:4, Insightful)
You forgot richer and better educated.
Because there are cheap Android phones that less well off people can afford, where as Apple phones are only available to people with a higher level of disposable income.
Oh and more sexually active
Being raped by Apple doesn't count.
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Because there are cheap Android phones that less well off people can afford, where as Apple phones are only available to people with a higher level of disposable income.
The 3GS is free with a contract. It doesn't get much cheaper than that.
Being raped by Apple doesn't count.
Rape jokes, eh ? You must be real popular with the ladies.
Tired of smart phones (Score:2, Interesting)
Soon as my contract is up I'm going back to a flip phone. Had an iPhone since they first came out, bought the 3gs, bought the 4, smart enough to realize the 4s was just more of the same, but with even more useless junk (Siri). Haven't touch my iPad in 2 weeks. It's too much and I've been working in tech since the early 90s, all I want now is simplicity.
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I just want a basic feature phone with a long battery life, that has a 4G antennae and bluetooth in it so I can use it to tether whatever real computing device I want at need. 95% of the "smart" features on my phone I don't use anymore, because they've been replaced by the same features on my larger screened Android tablet, and I also tethe
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What kind of battery life do you expect from a 4G feature phone that's pumping 4G data over bluetooth?
My guess is the iPhone is probably as battery efficient at acting as a portable hotspot as a feature phone is.
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Perhaps he's considering doing what I do when I tether my laptop to my phone - using WiFi tethering, but plugging the phone into a USB port on the laptop to keep it going.
You know, since there's a computer with USB ports always there when you're tethering to a computer.
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Re:Tired of smart phones (Score:4, Interesting)
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I'm the opposite. Everything is much simpler now because everything has been brought together and accessed through a single device [devost.net]. Much easier to cope with. Of course you need to have some constraint and say "no" when the next social-whatever bandwagon comes around so you don't drown in irrelevant shit.
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WiMax and LTE (Score:5, Insightful)
Can he defend their WiMax flub? Can he defend contracting with a company that has a non-existant LTE solution?
Re:WiMax and LTE (Score:5, Informative)
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You do realize they sold many WiMax phones with the understanding that they would build out the WiMax network. They did very little WiMax expansion. Was that the plan all along or poor planning? Either way the customers lose and some will leave Sprint.
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Re:WiMax and LTE (Score:5, Insightful)
What's the attraction to LTE when you have a 2GB datacap?
Re:WiMax and LTE (Score:4, Informative)
So you shit loads faster (Score:2)
My data cap is higher than 2GB, not sure what it is (might actually be unlimited, Verizion is nicer to business customer and my employer pays for the phone). However I don't use much, 1-2GB at most for most months since I prefer computers for my web surfing.
However when I do use it, the LTE load times are really nice. Stuff loads FAST. So when I'm in a store and I need a price check on something, I can get it in a hurry, I'm not waiting around forever for pages to load, even when they are non-mobile pages.
N
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you think shit doesn't load fast on a proper "3.5g" 10mbps link?
unlimited 3(.5)g is fun. for torrenting all day long(because I'm on the suckiest oper in finland, I get a slowdown at 20 gigs).
doing fast long transfers is the point for lte. and that by using extra freqs you'll have more bandwidth to sell and could give users more bandwidth to use.. but that's not good for business.
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And if you want the fastest LTE, Clearwire - Sprint's WiMAX provider - still has a lot of higher frequency spectrum that it's beginning its LTE buildout on. Higher frequency (than the other LTE nets) makes for less range from tower, but it also makes for much greater bandwidth.
This all comes down to a race against a cash crunch that's facing both Clearwire and Sprint (and Sprint's building its own LTE, not just planning to rent Clearwire's - and it has lower, wider-coverage frequencies to spare for that due
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Sprint Board revolt (Score:5, Interesting)
The SprintUsers site had an interesting commentary regarding a recent WSJ article on Hesse:
http://www.sprintusers.com/could-hesse-lose-his-job [sprintusers.com]
Today’s Wall Street Journal has a rare, insider-rich piece targeting Hesse. A betting man would say his own board of directors had a lot to do with the story. No, no one on the board is quoted directly. But the picture the WSJ paints is certainly a flattering one of an engaged, hands-on board. They are served well by this story.
You don’t see this sort of knifing when an exec is secure in his job. It usually means board members are trying to distance themselves from a CEO’s plans gone wrong so they don’t get personally sued by shareholders. Or they’re getting ready to fire him.
Just last month, Sprint made an abortive attempt at a merger with MetroPCS, which was championed by Hesse but ultimately shot-down by the board. I have a feeling the company is going to experience a coup d'etat any day now. Well, whatever -- as long as my legacy SERO plan keeps working.
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Yeah, but if you want to get rid of the guy and make sure Wall Street thinks it's a good idea (i.e. not have your stock price tank after firing him), subtle jabs at his competence are the way to go.
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Hesse is full of crap (Score:3)
Ignore everything he says to justify iPhone on Sprint, what Sprint really wants is to get in on the Apple party.
As a Sprint customer with an Android 4G phone (but no 4G service in my area, and I pay $10/month for it), I really would rather that they spend that pile of money on building out their network. Sure, they're going to roll out LTE over the next couple years, but my phone isn't LTE. Dammit. And my city will be among the last to get Sprint LTE.
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so, you got yourself into a contract where you pay for a non existent product, I like your way of thinking
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Unfortunately, if you don't want to pay the extra fee, you're pretty much limited to a handful of 3G-only smartphones (Marquee, Arrive, and some old models). Sprint will refuse to activate a 4G-capable phone for you, regardless of the network status in your market.
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It is still a pretty big load of crap. I have a Personal BB package on an older voice package. It is $30 extra a month that includes 'unlimited' data/text/SMS. And while I don't use it all a lot I do make use of all of it. I've also used more recent BB's and by in large they are the same type of thing. To my veteran eye the total data use between my older fully a smartphone BB and a newer one can not be all that big a delta; if there is any at all.
And yet Sprint wants me to pay more a month for a newer
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so.. you pay a data fee.. and a data fee.. ?
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Yep, Sprint double dips into the data fee bucket. That's reason one why I am not renewing my 2 year contract with them. I am going to stick to my old android phone and the grandfathered data plan until one of them dies. Then I am going to switch to another carrier (not sure how this will work out because the only other alternative here is AT&T). The second reason I am not upgrading is that they are converting their network to LTE. I don't know how many of the phones they are selling now will be compatib
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Better billing alternative (Score:2)
I had a plain old cell phone for years on Sprint, and never liked the phoney "regulatory recapture" fees. Nor did I want to start paying $100 a month just to have a smartphone. Their network, in places I tend to be, is good though. So I dropped Sprint and went to Ting, where you pay for your phone up front (no subsidy), but then for voice/text/data pay by actual usage, with nothing extra for the WiMAX flavor of 4G, or for using the phone as a wi-fi hub to tether other devices. Since I'm not a huge mobile da
Canceled Sprint (Score:4, Informative)
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Same here, though I went to the T-mobile $30 5gigs plan and didn't pay an ETF. Fuck Sprint. First they add that nonsense $10 charge on. Then they changed the employee discount program to be more expensive with multiple lines. They also seem to just give the customer a huge "F U" and tack like $6 or more of random fees and shit on your bill.
My $30 is (almost) $30. No fees. No overages. I theoretically pay a few bucks sales tax, but I found a place to get the T-mobile cards for like $29 for a $30 card
What 4G? (Score:2)
I bought my 4G phone almost 2 years ago and have yet to see any 4G service. Yet all the other carries seem to have it...
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I bought my 4G phone almost 2 years ago and have yet to see any 4G service. Yet all the other carries seem to have it...
Who's your provider? I would say come over to T-Mobile (they'll let you just buy a SIM and drop it in) but I don't think your spectrum will match.
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T-Mobile is GSM sprint is cdma so that won't work
Yep. That sucks, assuming he was on Sprint to begin with, which is why I asked.
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True of all US networks.
1. They got away with calling LTE "4G" (the ITU has reluctantly now followed suit).
2. Worse, AT&T is advertising their DC-HSPA+ and HSPA+ networks as 4G (which is completely insane). Amusingly, the recent iOS 5.1 release running on an iPhone 4S now reports "4G" when on HSPA+ ... but ~only~ on AT&T's network (connect it to any other (DC-)HSPA+ network, such as Telstra in Australia, and it still says "3G".
this is why i left (Score:3, Interesting)
is it smith or darwin? (Score:2)
I love it when some suit mouths off to customers about how profitable they are. guys - you're great... for my wallet!
I wonder how much Sprint makes selling the customer list - after all, someone who chokes down Apple's margins is likely to buy other stuff that's well-marketed.
Ya well, it is no big secret. (Score:2)
That's one of the reason companies like Apple users: They tend to have more money than sense. Ok maybe that's unfair, but there are a lot of them who are in to being trendy, and are willing to spend a premium on that. That's why they buy Apple products. Apple is cool right now, as cool as it gets, and they'll spend the premium to have that.
That is a wonderful market to sell to. You don't want a bunch of miserly customers who want to nickle and dime everything and spend as little as they can. My parents had
Considering how crappy their WiMax coverage is (Score:2)
and how poorly their service works in some places Sprint truly is planning to be the next AT&T.
Seriously, WiMax coverage seems to work specifically in upscale neighborhoods and dense metro areas with practically none outside of there. Heck, I live in a reasonably nice area, but WiMax stops right at NASA Parkway and doesn't go much South of there. Up North it works in the main parts of Kingwood, but not the outskirts.
Their 3G coverage is similarly sparse. The fact I actually saw a Sprint store in Bato
Because you must pay for a data plan (Score:2)
iPhone users use less data on average because many of them don't even need a data plan. But they must pay for one. A "high-end 4G Android device", on the other hand, is more likely to be chosen by the spec-optimizing, lives-on-the-internet, gonna-use-everything-I-paid for geek crowd.
He's right, but only partly (Score:2)
I left sprint because they had no decent phones. I ended up going to AT&T for an iPhone but I was looking at Palm and Windows devices at the time. Sprint customer service was rude and they didn't seem to care to keep us. We're were planning on doing a big upgrade on our plans too.
Getting decent phones was a problem for them a few years ago. Their customer service was worse and if you didn't live in the right area the network was also a problem. I happened to live in a good sprint zone. Making a de
This might be why they raised prices mid-contract (Score:3)
Sprint just raised prices mid-contract (only $5/mo but it could have been $1000 from the terms of the contract). When I called to get clarification they pointed me to the clause in the contract that says this: "We may change any part of the Agreement at any time, including, but not limited to, rates, charges, how we calculate charges, discounts, coverage, technologies used to provide services, or your terms of Service." They then will give you 30 days from the time of first notice (which is made on page 4 of the bill 30 days before the price is raised so by the time you see the price change you are already passed the 30 days) to drop Sprint if you wish. Of course that means sending back the $200 phone I paid for and getting nothing in return (no return charge and no phone). Basically this says is I am stuck with the agreement but really get nothing from it. They can change the price, length of contract, anything at any time and if I make changes then I get an early termination fee.
The long and short is I am stuck with Sprint but will be moving away from them upon contract end and will never go back. I don't like to do business with companies that operate like this. I read the contract before but somehow must have missed this gem of a clause. I won't make that mistake again. It may be just me but any company that would ask the customers to sign something like this is no company I want to be doing business with. For the customer you are basically agreeing to pay an unknown amount if you quite (they can change that too you know) for an unknown amount of time at an unknown price. The simple fact that they have not raised you monthly rate to $1000/month and extended you term to 10 years with a $5000 ETF does not mean they legally can not. To sign something like this is simply foolish IMO. A mistake I do not intend to repeat.
The fact that this price raise might be to cover new iphone subsidies just adds insult to injury. Next time I will buy my phone outright and use only prepaid services. The terms of service for all carriers are much too long to even bother with. Just another way that U.S. business is at a disadvantage compared to many other countries.
A shame they let palm/pre die (Score:2)
They should have given more love and better advertising to the Pre. I moved from ATT to Sprint just to get one. And at the time, I would never have even known it existed had a friend not told me about it.
Also,
Sprint is the only carrier I know of that charges per minute to forward calls. When at home, I used to forward to my vonage line so people could get in touch with me. That was a wakeup on the first bill from sprint!
Re:IRaped (Score:4, Funny)
This is how you utilize a first post?
Re:IRaped (Score:5, Interesting)
This is how you utilize a first post?
What a waste.
.Net. It sounds like Mr. Hesse is actually doing that.
Now, when it comes to the topic at hand: Bill Gates and Steve Ballmer were fond of using the phrase "bet the company" on certain initiatives, such as
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"No one ever got fired for buying Apple." It's a brave new world isn't it?
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"No one ever got fired for buying Apple." It's a brave new world isn't it?
If it fails, he will.
Re:CEO Defends Decision To Bet It All On The iPhon (Score:5, Interesting)
In the one corner Apple [macrumors.com], in the other such winners as HTC [allthingsd.com], Motorolla [techcrunch.com], Nokia [cnet.com] and Sony Ericsson [engadget.com]. CEO's always get fired if they back the wrong horse, but he picked the one with the right odds.
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Re:CEO Defends Decision To Bet It All On The iPhon (Score:5, Funny)
Totally forgot about RIM [techvibes.com], but then who hasn't ;-)
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Google's revenue isn't from mobile directly. Samsung refuse to release numbers so smartphones may not be responsible for their rise in profits, it may be all those components they are selling to Apple (like the new iPad retina screen.) The Chinese are doing quite well on the low end but that's not good news for the smartphone industry because it means the rest of them are caught in the squeeze between the Chinese on one end and Apple on the other. On the whole, if you're not Apple, the market is pretty crum
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Actually, you'll find that the stock Android experience is a. more popular among most users than the likes of Sense and Touchwiz
Really? My phone came with Sense and the first thing I did was replace it with Cyanogen Mod. The second thing I did was cringe at how much worse the UI got and revert to the firmware it came with...
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It's pretty funny that the one* UI available on iPhone is leaps and bounds better than anything I've ever seen on Android.
Widgets on the homescreen?