Will the Google Phone and Palm Pre save Sprint?
Sprint announced on Thursday that it will begin offering the Hero smartphone made by the Taiwan-based mobile phone maker HTC. The Hero phone is referred to as the Google phone since it is the first phone offered by Sprint that runs Google’s Android operating system. Sprint has been focused on reversing recent subscriber losses by introducing attractive new phones such as the Palm Pre and now the Google Phone.
Monthly subscribers to Sprint’s mobile phone service (Postpaid CDMA Susbscribers) have declined from a peak of 28 million in 2007 to 25 million today due to the company’s limited selection of smartphones (including the popular iPhone) and poor customer service resulting in defections of Sprint customers to Verizon and AT&T. We expect the subscriber decline to continue and estimate that the company will have 23 million subscribers by the end of the Trefis forecast period. However, the Google Phone and Palm Pre could help Sprint limit subscriber losses by strengthening the company’s smartphone offering while Sprint and Verizon wait for AT&T’s iPhone exclusivity to expire.
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Mobile Plans & Phones constitute 57% of the $4.37 per share Trefis estimate for Sprint’s stock. Within Sprint’s content on our platform, you can see how the company’s share price would be impacted if the introduction of new smartphones were to help stem losses in the Number of Subscribers.