updated 08:15 am EDT, Wed July 29, 2009
Sprint Q2 2009
Sprint on Wednesday revealed spring quarter results that show the Palm Pre having relatively little impact on its health. The company's losses widened to $384 million compared to $341 million a year ago and it reported losing about 257,000 total customers, shrinking to 48.8 million users. While it gained 938,000 prepaid customers on Boost Mobile, this and other gains were offset by losses across the board, including 393,000 of its core CDMA phone network users.
The company also struggled in other areas. Its churn, or turnover that replaces old customers with newer ones, was 2.05 percent; this was down from 2.25 percent in the winter but an increase from 1.98 percent a year earlier. The increase was due to companies shutting off service in the tough economy, Sprint claims. However, while its revenue from data plans grew slightly, the company's typical revenue per person was flat at $56 year-over-year as usage dropped.
In its numbers, Sprint chose not to break down how many Palm Pre units it had sold and would only say that it had the best number of net retail subscriber additions in almost two years, suggesting that the Pre launch was directly responsible for the gain. Company chief Dan Hesse noted that the introduction was "record-breaking" and that it helped reinvigorate the company's image, but didn't provide further details.
While it wasn't expected that the Pre would immediately reverse the company's losses, the lack of significant improvement shows the touchscreen smartphone having little impact compared to the iPhone 3GS at AT&T, which formed a major part of AT&T's business, including its new subscribers and its wireless data revenues. It's unofficially estimated that over 50,000 Pre phones were sold on the June 6th launch weekend, but the number is a fraction of the 1 million iPhones sold worldwide in Apple's June 19th launch weekend.
Sprint hoped to partly counter its losses with yesterday's news that it would acquire Virgin, which should give the carrier control of the prepaid phone business in the US.