Sprint Nextel is still shedding subscribers, but, with new handsets to offer, it is slowing down the rate of subscriber loss, according to financial results out today.
And in particular, a Sprint executive I interviewed says smartphones it’s introducing running Google’s Android operating system have the best chance of boosting sales, particularly against the popular Apple iPhone sold exclusively to run on rival AT&T’s network.
The third quarter results look rough, though. For the three months that ended Sept. 30, Sprint lost $478 million, or $0.17 a share, on revenue of just over $8 billion. That compares to a loss of $326 million, or $0.11 a share, on revenue of $8.8 billion in the third quarter of 2008.
Losses were deeper than the $0.15 per share estimate of analysts who follow Sprint Nextel Corp. (NYSE: S).
Sprint’s subscriber numbers, while down, show some glimmer of hope for Sprint. Although it suffered a net loss of 135,000 subscribers in the quarter, it uses somewhat tortured language to explain that it signed up more subscribers this quarter than in the year ago quarter and more so far this year – even though more people unsubscribed than subscribed: “The company’s year-over-year post-paid gross addition improvement was the best in Sprint Nextel history, and the sequential improvement was the best in more than five years.”
Post-paid subscribers are those, usually on a contract, who pay for their service after it’s provided. Prepaid customers pay for their minutes before they get to use them.
Sprint has introduced 16 new phone models from various handset makers this year that may be shoring up their subscriber numbers, most notably the Palm Pre, launched in June. While the Pre enjoyed some strong early buzz and strong sales, they petered out soon after and Sprint reduced the price of the smartphone running Palm’s new webOS operating system after a few months.
Still, Sprint has high hopes for other handsets newly introduced or on their way, including the Palm Pixi, which goes on sale Nov. 15, the HTC Hero, which went on sale Oct. 11, and the Samsung Moment, which debuts Nov. 1. Both the Hero and the Moment run Google’s Android OS.
Android has the best chance to challenge the Apple iPhone “juggernaut,” said Steve Elfman, president of network operations at Sprint, whom I interviewed at the carrier’s 2009 Open Developer Conference Tuesday in Santa Clara, Calif.
While Apple sold 7.4 million iPhones in the third quarter, several factors point to the Android OS gaining ground against it, Elfman explained. Android is available on multiple brands of handsets – Samsung, Motorola and HTC, for example – and on multiple carriers -- including Sprint, Motorola and T-Mobile – while iPhone is, so far, only available on AT&T. And Android has Google behind it.
“Apple has a good brand, but this is where Google and Android start to become a compelling alternative, as well, because it’s got a great brand. Consumers know [Google] and love it,” Elfman said. “[Android] is one of those operating systems that has an opportunity to take a great deal of market share very rapidly.”
And beleaguered Sprint, hemorrhaging subscribers, hopes to ride Android’s coattails to a recovery.
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