Sprint Failing to Lure New Customers with Pre

Shares of both Sprint (S) and Palm (PALM) both tumbled Wednesday after an analyst issued a report that suggested that Sprint is failing to lure customers away from rival carriers with the launch of the Palm Pre smartphone earlier this month.

Seeing how it hasn’t even been two weeks since the Pre launched and the devices sold out almost immediately, it may be a little premature to say that Sprint and Palm are failing here (but when has Wall Street taken something like that into consideration). It is true, though, that Sprint and Palm both need to up their games in terms of marketing and advertising not only the Pre but also the better-value service plans that the company is offering.

Also see: Palm Pre weekend: Sprint could steal Palm’s moment

I’ve long said - and am growing tired of saying - that consumers should quit choosing wireless service based on the device and really start making their decisions on the quality and pricing of the service. If everyone did that, maybe there would be a lot less hype over the iPhone, seeing how it’s on AT&T’s (T) really poor network.

Here’s Sprint’s chance to take advantage of the public relations beating that AT&T is experiencing over its network quality. I can see the commercial now…

SPRINT: “Hello. I’m Sprint.”

AT&T: “Hello. I’m AT&T.”

SPRINT: “Wow, AT&T. People sure are picking on you lately over these iPhone service problems.”

AT&T: “Are they? I haven’t noticed? No one has called me on my iPhone to complain.”

SPRINT: “Really? No calls about that?”

AT&T: “Well, it’s hard to say. My signal goes in and out at home sometimes. And in the office. And in the car, too. I might have missed a call or two. But, you know, we’re working on…..”

(AT&T goes silent)

SPRINT: “AT&T? You OK, there?”

(SILENCE)

SPRINT: “Ummm… AT&T? You still with us?”

(AT&T springs back to life.)

AT&T: “Hello. I’m AT&T.”

SPRINT: “Right. We’ve established that.”

AT&T: “Sorry. I must have faded out for a…”

(AT&T goes silent again)

SPRINT: “Wow. He seems to do that a lot. I wonder if iPhone users have noticed?”

Now’s your chance, Sprint. Wall Street wants to see new subscribers, not old subscribers upgrading their phones. According to a Bloomberg report, Sprint has lost more than 4 million contract customers in the past year, lured by devices such as the iPhone and Blackberry Storm. Apple had success with its switch campaign by pointing out the flaws of its biggest competitor and playing up its strong points.

There’s no reason Sprint shouldn’t be doing the same - before it’s too late.

Comments

[Zenfar:]

"Seeing how it hasn’t even been two weeks since the Pre launched and the devices sold out almost immediately, it may be a little premature to say that Sprint and Palm are failing here (but when has Wall Street taken something like that into consideration)."

Great comment!

Jun 18 04:39 PM

[CGP:]

Metaphorically, all the commentary on how Palm\Sprint are doing -

Situation: boiling water, 2 pots (in a kitchen full of many)
Interested parties:
1 min 00 sec - "Is it boiling yet?"
1 min 15 sec - "Is it boiling yet?"
1 min 30 sec - "Is it boiling yet?"
1 min 45 sec - "Is it boiling yet?, What's the matter? Why isn't it boiling yet? The other pot that started 10 mins ago is bubbling away"
ANS - "We have the pot, water is in it and the fire is on"

If the pot isn't starting to boil by the time Verizon steps in, there is a problem.

Jun 18 05:05 PM

[Udiveny:]

“Sprint has lost more than 4 million contract customers in the past year, lured by devices such as the iPhone and Blackberry Storm.” - Well not quite true…. After Sprint’s 2005 and 38 billion acquisition of Nextel’s 15 million customers,… The huge exodus started… almost all of these 4 millions lost are dissatisfied Nextel customers,..(Dissatisfied with Sprint customer support.. and problems with Den network..) Marriage of Sprint and Nextel is something as marriage of Target and Nordstrom,… Bottom line is that most of original Sprint clients didn’t left.. I am one of them…

Jun 18 07:45 PM

[waf76:]

sprint's service is way worse than ATT

Jun 18 07:46 PM

[Prudent Man...:]

How many different ways do some people need to communicate. You talk about an over-expanded industry? We were more productive when we just had a land line. Any correlation? All of these time saving devices haven't led to increased productivity only more wasted time.

Jun 18 08:04 PM

[Nextel Acce...:]

I think we need to give this a little more time until we really know the success of the PRE over the iPhone.

Jun 18 08:58 PM

[Aryamehr:]

When comparing devices one needs to compare both under the same parameters and circumstances before making judgements. When the iPhone was launched, it was essentially a revolutionary device, the competition was virtually non existant. However, the Pre was launched under completely different circumstances. The Pre was launched at a time when the market had plenty of competitors vying for the same customers. Smart phone consumers today have numerous choices from the iPhone, Storm, Bold, G-1, Nokia N97, HTC Diamond etc. and the just released Pre. Today most of these Smart phones have decent cameras, and are amply capable Voice/Data/Text devices, hence one should understand that no matter how good the Pre turns out to be, which IMHO is the best Smart phone to date, it will never be able to replicate the iPhone launch. Nevertheless, with time if it continues to evolve it can quite easily trump the iPhone in popularity. Its WebOS is designed with the Cloud in mind and it has a phenomenal User Interface. It is just a wonderful device to own. Apple tried earnestly to steal Palm's launch party for its Pre, however their much talked about upgrades had nothing that I could term revoloutionary, like the Pre's Multi-tasking and WebOS. Anyone can add memory to their device or improve on a pathetic battery. Apple touts the iPhone's App Store, even though 98% of the applications are useless. The Pre will have little problem emulating the iPhone's App store once it has sold enough devices. Over 10 million programmers are already familiar with HTML, CSS and Java, which are common languages used on the Web and since the WebOS was designed primarily to work with the web, you would be a fool to assume that they would not be able to match the iPhone's portfolio of applications very soon.

The best thing that happened to Pre was the iPhone 3GS. The Pre was not trumped by the new iPhone and if anything the Pre has more than met expectations. Since the iPhone 3G was unable to match the Pre, Apple had no choice but to lower its price from $199 to $99. This was Apple's real upgrade not the 3GS, the 3GS was just to grab attention away from the Pre. The iPhone 3GS still can't Multi-Task, still lacks a qwerty keyboard and you still don't have the option for changing its battery.

Jun 18 10:45 PM

[mgv11:]

Customers that change carriers are probably under contracts, as those contracts expire then they will be making decisions about their next phone, plan and carrier. As stated earlier this isn't about today, this is about the road ahead... it sounds like the changes at Sprint are coming together and culminating in the Pre.... time to watch the future coming at us.

Jun 19 01:37 AM

[Sprintired:]

People seem to be too focused on technology alone. Sprint has had problems with having the worst customer service. As a former Sprint subscriber, I can attest to the horrible service and the customer unfriendly support staff. Palm made a strategic mistake hooking up with Sprint instead of Verizon. The Pre may be a cool phone and it looks like it might be but Palm and Sprint are like two dying people trying to give each other CPR.

Jun 19 07:31 AM

[vassar:]

ATT is unfairly bashed about their service. I switched from Verizon and have not had any problems. In fact, in some places I travel, ATT has been better than VZW.

Jun 19 10:18 AM

[rajsekar:]

We need guys like Aryamehr, to bring some rationale into the thinking of analysts. Wall Street is too impatient for results. Analysts expect Palm and Sprint to do wonders within a week of rolling out a new phone. Have people forgotten how iPhone is now a cheap commodity for $99 sold in Walmart? What happened to the clowns who slept overnight outside Fifth Ave and Palo Alto Apple stores just two years ago? The smart user waited for one year and got $199 iPhone in June 2008 and now can get it for throw away price. So a creative company like Apple had to resort to massive price reduction to sell the most talked about device. Could Apple have sold 3 million iPhones for $499 each? Also analyst compare 50,000 apps. that Apple hosts. Most of the apps. are piece of junk and games. Are we just showing off numbers in app. stores? Let's give Palm a full quarter to see where things are headed.

Jun 19 05:36 PM

[smileforlife:]

From the sprintusers.com forum, it seems that more folks prefer TP2
then palm pre.
www.sprintusers.com/fo...

A lot of folks, including me, use the sprint SERO plan, which is 30$
per month for unlimited data and 500 min. When I was trying to ask for
Palm Pre, they said I have to change my plan to 99$ a month everything
plan. Even if I purchase the phone from ebay, I would not keep my
current SERO plan. I cant see the reason I drop my sero plan to go for
this hype

Jun 19 07:32 PM