iPhone users are more profitable according to Sprint

According to Sprint CEO Dan Hessem iPhone users are more profitable than the average smartphone customer. This is the reason given he was asked to justify his company’s decision in spending $15.5 billion to offer the iPhone to its subscribers last year. He added that not only were iPhone users more profitable, but also that they were more loyal and used less data than some other smartphone users.

Hesse explained that the subsidies needed to market the iPhone were higher and that the iPhone had recorded a large number of new subscribers. He substantiated that statement with a statistic that out of every 10 iPhones that were sold, 4 of them were to new customers. That statistic is about double the rate of its competitors and this is in turn would mean that Sprint is using the iPhone to attract customers from other carriers.

Now for the reason that Sprint wants to attract iPhone users, apparently Hesse says that iPhone use less data than one might think and also that they are more loyal. He added that data usage by owners of high-end Android devices was in the very high numbers and simply put, it would not be good for business. Based on a cost point of view and a customer’s lifetime value, he concluded that they would in fact be more profitable than the average smartphone customer.

Hesse’s claims that data usage is lower than we might think is backed up by a report from 2010 which claimed that Verizon’s non-Blackberry smartphone users blazed through more data than AT&T iPhone users before Verizon themselves started carrying the iPhone in early 2011.