Sprint Faces Long Road with HTC Evo 4G, Suggest Analysts
LAS VEGAS-Sprint introduced its 4G-capable HTC Evo 4G smartphone during a high-profile press conference at the CTIA Wireless 2010 convention on March 23, earning largely upbeat buzz, but analysts suggest that the carrier still faces an uphill battle in its bid to retain users and reverse a declining revenue trend.
Billed by HTC CEO Peter Chou as "the world's fully integrated 4G consumer handset," the HTC Evo 4G boasts a 4.3-inch capacitive touch screen, which Sprint is touting as an ideal vehicle for watching multimedia on the go, along with the Google Android 2.1 operating system and a 1GHz processor. In addition, the device incorporates an 8-megapixel camera with auto-focus, capable of taking HD video, along with a front-facing 1.3-megapixel lens.
"All reports are that the Evo 4G is a great little machine," Roger Kay, an analyst with Endpoint Technologies Associates, wrote in a March 25 e-mail to eWEEK. "I'm thinking that what HTC needs is more (and better positioned) carriers. Success in the phone business is denominated in tens of millions of units. I don't think the Evo (or any phone, really, short of the iPhone) is enough to boost Sprint out of the doldrums."
Other analysts concurred that Sprint faces a potentially tough road ahead.
"Sprint's new 3G/4G handset is a milestone in the mobile industry, and could help Sprint slow and even stop its subscriber losses," Mike Roberts, an analyst at Informa Telecoms & Media, wrote in a March 24 research note. "It's a milestone because it's the first dual-mode 3G/4G device launched in the U.S. and one of the first in the world. It could also give Sprint an edge in attracting and retaining high-value smartphone customers, although every operator is targeting that segment."
Sprint is losing postpaid subscribes at twice the rate of Verizon and AT&T, Roberts added, placing additional pressure on Sprint's lineup, headed by the HTC Evo 4G, to retain and attract them. Key to that, he believed, is creating software that will leverage the smartphone's capabilities in unique ways for both consumers and businesses: "Sprint's new 4G Mobile WiMax device will only really come into its own when it has a variety of applications that take advantage of the faster speeds of 4G, and that will take time."
On March 24, Sprint CEO Dan Hesse told the audience during his CTIA keynote address that the company's decision to invest in WiMax for its 4G technology, instead of LTE, allowed the company to be first to market with a 4G-enabled device.
Whether that move will continue to pay dividends was something that Hesse himself called into question, by suggesting LTE could become the dominant 4G standard in years to come.
"WiMax was a tried, true, tested 4G technology," Hesse said. "LTE will likely be the larger of the two 4G standards, but for us, we couldn't wait. Because of our spectrum position, we have the option to add other technologies later, but this allows us to get into the technology quickly.
"Time to market was very important," Hesse said. "That is our competitive position."
Sprint currently offers 4G capability in 27 markets, with plans to expand to Houston, Boston, Washington, D.C., New York and San Francisco by the end of 2010. To build out that network, Sprint has invested some $1 billion in WiMax technology, despite steady customer and revenue erosion over the past few quarters. In the fourth quarter of 2009, the carrier lost some 148,000 subscribers, noticeably less than the 545,000 lost during the third quarter.