Wireless company iPCS is a legal thorn in Sprint’s side no longer. This morning, Sprint said it would acquire its litigious affiliate for $831 million, including the assumption of $405 million of net debt.
The Palm Pre has proven a far better curative for the handset maker than for Sprint, its exclusive carrier. Certainly, the Pre doesn’t appear to have done much to reverse Sprint’s decline. Reporting second-quarter earnings this morning, Sprint posted a loss of $384 million, or 13 cents a share as customers defected to rival carriers.
The consolidation of the prepaid cellphone market has begun in earnest. This morning, Sprint Nextel said it will acquire Virgin Mobile USA in a $483 million stock deal that will give the company a clear lead in the prepaid arena, where low prices are becoming ever more popular with consumers beaten into submission by the continuing recession.
Add another voice to the chorus of analysts claiming that sales of the Palm Pre have been on the decline these past few weeks. In a research note published this morning, CL King analyst Lawrence Harris, speaking to the controversy over sell-though numbers for the Pre, cast his lot with those who feel sales are slowing.
Sprint best step up its marketing efforts for the Pre because according to Pali Research, demand for Palm’s new device is slowing, and quickly. During the week ending June 26, Pali estimates that Sprint sold 50,000-60,000 Pre handsets. In the weeks that followed, it sold “less than 40,000,” and then, “over 30,000”–again, according to Pali. Now the research outfit says sales have declined by another 5,000 units.
When Verizon Wireless CEO Lowell McAdam claimed his company would be selling the Palm Pre six months from now, he was apparently as full of it as a dairy farm manure spreader. At a Palm Pre launch event in New York city, Sprint CEO Dan Hesse dismissed McAdam’s claim as inaccurate.
One of the simplest ways to create a shortage, and the buying frenzy that typically accompanies it, is to announce that there will be one. And this is precisely what Sprint CEO Dan Hesse did for the Palm Pre Tuesday. Speaking at J.P. Morgan’s Global Technology, Media and Telecom Conference shortly after Sprint announced the handset’s street date, Hesse said he anticipates that supplies will be limited, at least initially.
It’s almost as if Sprint Nextel’s postpaid customers can hardly wait for their contracts to expire so they can jump to another carrier. The troubled wireless carrier lost more than one million postpaids in the first quarter of 2009 amid fierce competition from rivals AT&T and Verizon Wireless.
Sprint will release Palm’s new Hail Mary handset, the Pre, when it’s good and ready, and not a moment before. This according to Sprint CEO Dan Hesse, who says the company won’t rush the phone to market no matter how desperate it gets (and its new $125 referral program would seem to suggest it’s getting pretty desperate).
Sprint Nextel has been hemorrhaging subscribers like Dan Ackroyd’s exsanguinating Julia Child for the past several quarters and its latest quarter was no different. Announcing fourth-quarter results that, remarkably, came in ahead of expectations, the much diminished wireless carrier said it lost 1.27 million customers during the period, for a loss of 4.58 million subscribers in 2008. UGLY.
What a great choice of carrier partner Palm has in Sprint Nextel, eh? A company with a longstanding reputation for lousy customer service, poor network coverage, high churn and Keystone Kops-style management disorganization. A company that lost 1.3 million customers in the third quarter. And now a company that plans to sack 8,000 employees, or 14.3 percent of its workforce, by the end of March–a month rumored to see the introduction of Palm’s new hail-Mary handset, the Pre.
Discussing the latest in Sprint Nextel’s sad little parade of earnings announcements with analysts this morning, CEO Dan Hesse said the company has “yet to turn the corner” on the road to recovery. Looking over the company’s financials today, I’d say the corner to which he refers isn’t even in sight yet. If anything, Sprint appears to be heading down one of those bleak midwestern straightaways–in this case, jammed with the traffic of its fleeing subscribers.
John Paczkowski has been poking fun at the tech industry and the personalities that drive it since 1997. From 1999 to 2007, he wrote the award-winning tech news Web log Good Morning Silicon Valley for the San Jose Mercury News, Silicon Valley's daily newspaper.
Here is a statement of my ethics and coverage policies. It is more than most of you want to know, but, in the age of suspicion of the media, I am laying it all out.
Best video mashup ever.
A Facebook Memorial
Wow.
Worth it for the Rickrolling photo alone.
Excellent.
Flughumor!
… you vacuous, toffee-nosed, malodorous perverts
Stephen Fry and zoologist Mark Carwardine meet the kakapo — a fat, flightless and very randy rare parrot.
Spectacular in the bellowing Russian sailor sense of the word …
“If you spell something wrong on your insurance claim, do you really deserve surgery? I don’t think so …”
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