During their annual shareholders meeting, Sprint CEO Dan Hesse said they're very happy with the iPhone, but admitted that it won't be profitable for the company until 2015. Sounds crazy, but Hesse says they're taking the long view, since offering the iPhone will stem the exodus of users going to other carriers just to get their hands on Apple's smartphone. Plus, iPhone users tend to be heavier data users, so that means bigger plans. (Or in Sprint's case, opting for the unlimited plan.)

Hesse had to take a bonus cut as a concession shareholders upset at the up-front cost of iPhones, but the future does actually look pretty bright. They've confirmed that they'll keep unlimited plans around for the next generation iPhone, even if it has LTE, and recent surveys show that Sprint customer satisfaction is pretty high.

That leaves another two and a half years of paying for their iPhone deal, which reportedly cost them $20 billion. Granted, they didn't have much success with either webOS or Android, despite the lower up-front costs, so it's still difficult to see a basis for the complaints -- other than shortsightedness.

There's also the not-so-small matter of Sprint's initial, WiMax based 4G rollout, which is hard to view as anything other than a failure. They're switching to LTE now, but they're behind AT&T and way behind Verizon, and it will take time and money to catch up, neither of which Sprint has in abundance.

When the next generation iPhone hits, presumably this fall, will unlimited data make up for the lack of Sprint LTE footprint? Or will even more customers go with Verizon or even AT&T's bigger service area?

Bottom line, how healthy is Sprint going to be looking in three years compared to Verizon and AT&T? Will the iPhone gamble pay off? And will they at least still be doing better than... T-Mobile?

Source: AllThingsD

According to P.T. Barnum, no one ever went broke overestimating the stupidity of the American public. Sprint CEO, Dan Hesse, however, is going to lose $3.5 million for underestimating the stupidity of his shareholders. This, after Sprint was rumored to have broken their piggy bank wide open by agreeing to buy 30.5 million iPhones from Apple for a whopping $15 billion over the next four years.

Shareholders are upset because the iPhone is expensive -- upwards of $200 more than competing smartphones from other vendors. The problem Sprint faced, however, is that not as many people wanted those cheaper competing phones. They wanted the iPhone. No other single phone in the industry sells as well or increases customer retention as much as the iPhone. Sprint waited as long as they could, almost a year longer than Verizon, and threw all sorts of webOS and Android devices at their customers, and they just couldn't fill the iPhone void. So they made the deal with Apple.

Since then, Sprint sold 1.8 million iPhones and added 5 million net new customers in Q4 2011, and sold 1.5 million iPhones, 44% of which went to new customers, in Q1 2012. Yes, the upfront cost of subsidizing the handsets have hurt short term profits, but it could be worse. They could be T-Mobile, who places the blame for their slump squarely on not having the iPhone.

Given how much of AT&T and Verizon's sales last quarter consisted of the iPhone, it be interesting to see what the brain trust behind Sprint's shareholder discontent thinks Dan Hesse should have done instead. Invested the money in a time machine so he could take them back to a pre-2007 smartphone world?

Still, executive compensation being tied to actual performance is never a bad thing and if Dan Hesse is reducing his incentives in the face of Sprint losses, that's a great gesture to the company in general, never mind the iPhone complainers.

"These voluntary actions regarding my personal compensation, which total $3,250,830, will eliminate any benefit for me to the discretionary adjustment the compensation committee made earlier this year," Hesse said in a letter to the company's human resources department.

So basically, Hesse's 2012 incentives are now back down to 2010 levels. He'll still be making more money than most of our towns, Apple will still be making more money than many of our nations, and Sprint's investors will still be making more complaints than a 3 year when the toy store closes.

No word on who's getting their pay docked or hand slapped for wasting years on WiMax before finally turning towards LTE a year late and billions short. Obviously that's no where near as bad as getting the best selling phone in the U.S. on your network...

Source: Reuters

Sprint CEO Dan Hesse was put on Charlie Rose's hot seat and asked the pointed question: "Is the Palm Pre making a dent into the iPhone market?"

Hesse's response?

Aaah... It's-it's doing well, but you can almost put the iPhone, to be fair, in a separate category. The Apple brand and that device have done so well, it's almost not... it's like comparing someone to Michael Jordan.

Gizmodo figured they'd remind Hesse that it was, in fact, the same category and that Apple needs competition (the consumer needs competition). Engadget thinks it was a duly respectful and tactful acknowledgement of the iPhone's success.

We think it's nice to hear a wireless CEO who's not so bombastic and, frankly, disconnected as most of them seem to be, as evident by Hesse's answers on Android, Nextel, the price of touchscreen handsets, and battery life as an impediment to smartphone growth.