Could the Kindle DX save Sprint Nextel?
If Amazon's new bigger-screen e-reader, the Kindle DX, lives up to the hype, it could be good news for Sprint Nextel.
(Credit:
Amazon)
Amazon's CEO Jeff Bezos on Monday unveiled the much-anticipated large-screen Kindle e-reader in New York City. The new Kindle DX is geared toward readers of personal and professional documents, newspapers, magazines--and textbooks, a potentially huge target market.
Analysts are expecting this new Kindle to be a big hit. The larger screen and PDF reader will help open up the device to a whole new market.
While huge sales of the new device will obviously benefit Amazon, it's also likely to help boost subscriber figures and revenue for Sprint Nextel, which provides the wireless service used to download the textbooks, documents, and newspaper articles.
The way the arrangement between Amazon and Sprint works is that Amazon sells the Kindle to consumers and bundles the wireless service with the device. This means consumers never get a bill from Sprint. Meanwhile, Sprint charges Amazon a wholesale price for network usage on a per device basis.
More Kindle users could help Sprint, which has been has been struggling to retain customers since its acquisition of Nextel. In fact, if it hadn't been for the Kindle, Sprint likely would have had an even uglier first quarter. During the first quarter of 2009, Sprint lost about 1.25 million of its most valuable post-paid cell phone subscribers, the company said Monday.
But the company was able to offset some of those losses with subscriber gains from its wholesale and affiliate subscribers. In fact, Sprint managed to add about 394,000 wholesale customers during the quarter, which made the total customer loss look a lot better. Sprint's CEO Dan Hesse attributed subscriber growth in wholesale to market opportunity for open network devices, such as the Amazon Kindle 2.Right now, it's unclear exactly how many Kindle devices are using Sprint's network, or exactly how much revenue the carrier generates for every Kindle user through its arrangement with Amazon. But for a company that is trying to compete in a wireless phone market that is over 80 percent penetrated, new opportunities like the Kindle can only help.
As a result, Sprint isn't the only mobile operator going after this market. AT&T and Verizon Wireless have each said they plan to offer service for more non-cell phone devices on their networks. At the CTIA trade show in Las Vegas in March, Verizon Wireless said it was talking to five e-book makers about making their devices available on Verizon's network. AT&T wouldn't provide details, but executives hinted that an e-book deal could be in the works for its network as well.
Just last week, rumors surfaced that Verizon could be working with Apple to launch a new "media pad." This device would allow people to read books and newspapers, but it would also allow them to a lot more, such as listen to music, view photos, or watch high-definition video. Details about the rumored Apple "media pad" are still scarce, but it could provide a challenge to the e-reader market and could help Verizon generate a new revenue stream from a new wireless device.
Marguerite Reardon has been a CNET News reporter since 2004, covering cell phone services, broadband, citywide Wi-Fi, the Net neutrality debate, as well as the ongoing consolidation of the phone companies. E-mail Maggie. 
And not sure about a E-Reader giving them a huge boost how many Americans actively read compared to those that don't.
Sprint needs to sell regular cell phone service.
Period.
Anyway, the device looks interesting if not designed for a fragmented group. Time and time again it's been shown people would rather read the paperback book itself rather than mess with some electronic gadget that needs recharging, etc. Can you imagine using this thing in bed? Anyway, I digress.
The real headline, I think, would be: "Will Real Readers Want to Screw With This Thing?"
Anyway, the device looks interesting if not designed for a fragmented group. Time and time again it's been shown people would rather read the paperback book itself rather than mess with some electronic gadget that needs recharging, etc. Can you imagine using this thing in bed? Anyway, I digress.
The real headline, I think, would be: "Will Real Readers Want to Screw With This Thing?"
The total number of Kindles sold...ever...would not even begin to make up the number of phone subscribers they are losing.
Can Wimax save Sprint?
Can Pre Palm save Sprint?
Can Upstage save Sprint?
Can Jesus save Sprint?
If Sprint were a prize fight, they would have stopped it.
'In eight weeks of service - it launched in February - Boost's new $50 unlimited plan added 764,000 new pre-paid customers.'
http://online.wsj.com/article/BT-CO-20090506-715500.html
That's making up for over half of the subscribers they lost in Q1. Kindle DX won't generate that much revenue in a 52 weeks, let alone 8.
Facts: For 2009 YTD, Sprint has outperformed every other company on the S&P 500. Sprint has improved customer satisfaction ratings for 15 straight months. Sprint tied Verizon for best call quality in the West region, according to JD Power. Sprint's wholesale division (including Kindle) is up 30% YOY. Sprint now has a CEO that actually gets it. The Palm Pre is an ass-kicking phone (I've gotten to play with it). Sprint's network performance is dramatically up over last year, especially on the iDEN side. Sprint is swimming in cash and paying down giant chunks of debt at a time when financial institutions and car companies need bailout money just to write paychecks every week.
Too bad everyone hasn't caught on yet, but Sprint is on the upswing. Big time.
I'm stuck with 10,000 shares at $19. I'll be as bleeping negative as I want. Upswing!!!! They'll never see $19 a share again. Hesse will be Forsee's Dean of Admissions at Missouri. You sound like one of Dan's elevator speaches. Going down.
Forsee really messed up the company along with Tim Donoghue, but Hesse is bringing it back. Don't think I wasn't skeptical at first, but the guy won me over. When something sucks, he'll say it sucks, then he goes about fixing it. And when he goes about fixing something, he doesn't do the common Wall Street "get our numbers up for next quarter" crap. He fixes them the right way, and sometimes you don't see the benefit of that for a year or two or five.
I don't care if I sound like a cheerleader. I've worked for some really s**tty CEO's, and I'll call them out. Hesse is one of the good guys.
- by 10000sharesAT19 June 9, 2009 6:38 PM PDT
- hey racqueteer
- Like this Reply to this comment
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(19 Comments)Sprints problems are bigger than Hesse. Your out your mind, they'll never see $19 again. They are waiting for the credit market to get better so they can unload this dog on the Koreans.