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Hesse to give up $3.25M of his salary to hush iPhone haters

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#1 BenChase7

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Posted 04 May 2012 - 11:04 PM

Mr. Hesse has agreed to give up $3.25M of his compensation in an attempt to shut-up those who oppose the iPhone investment.

http://www.kansascit...25-million.html

I'm not an iPhone fan by any stretch of the imagination,but it has helped Sprint to bring in new customers as they transition from WiMax to LTE... So, (imo), the investors should be thankful, in some respects.

#2 MacinJosh

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Posted 04 May 2012 - 11:24 PM

Mr. Hesse has agreed to give up $3.25M of his compensation in an attempt to shut-up those who oppose the iPhone investment.

http://www.kansascit...25-million.html

I'm not an iPhone fan by any stretch of the imagination,but it has helped Sprint to bring in new customers as they transition from WiMax to LTE... So, (imo), the investors should be thankful, in some respects.


Yes they should be grateful. But not everyone will ever be happy. That is the sad reality. But at least he is willing to make it right. Stark contrast between him and Randall Stephenson, that's for sure.

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#3 JeffDTD

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Posted 05 May 2012 - 06:40 AM

Indeed, Hesse makes an admirable contrast to Stephenson.

I had two very distinct immediate reactions to this:
1) Dan Hesse= a man after our hearts.... willing to offer up a portion of his pay to quell discontent. This demontrates his passion for the company and willingness to take responsibility. A far cry from the company's immediate history.

2) Its only fair. Many longtime, loyal customers were forced to sacrifice loved perks and pay higher prices upon arrival of the iphone. Its only fair that he give something up.

I think Mr. Hesse is just about as "ride or die" as it gets in CEO land lol

#4 EarlyMon

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Posted 05 May 2012 - 07:39 AM

Hmmmm.

$15.5 billion commitment, expected to return $7 billion over 4 years, immediately forced Sprint to seek $7 billion in financing, Sprint pays 40% higher subsidy to Apple than other carriers, loses stock value immediately, and since the deal went down, has added 1.1 million new subscribers.

And I doubt that last figure.

And what's the NV investment? Huh. Just happens to be about $7 billion.

See any coincidences that add up? See any that don't?

I have no clue what's up here, but it's obvious to me that something is going down and no one has connected the dots yet.

At face value the entire deal is irrational, and whatever you think of Hesse, he's not irrational.

What's this really about? Whose back is really getting scratched? Because someone's is.

And giving up this chunk of change has to be a distraction. We're looking at the wrong thing. I don't know what the right thing is - yet - but there's something rotten somewhere.

The iPhone deal is tied to NV financing. We're not supposed to be looking at that.

This whole story is so out there that it's not even capable of rising up wrong.
Bang!

#5 Rawvega

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Posted 05 May 2012 - 08:11 AM

Sprint pays 40% higher subsidy to Apple than other carriers


Would you mind citing your source for this statement please? Thanks.

#6 EarlyMon

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Posted 05 May 2012 - 08:16 AM

http://www.phonearen...billion_id23294

Sorry, meant to put that in earlier.

Here's for the subscriber figure -

http://www.phonearen...quarter_id29458

Edited by EarlyMon, 05 May 2012 - 08:26 AM.

Bang!

#7 S4GRU

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Posted 05 May 2012 - 08:31 AM

http://www.phonearena.com/news/Sprint-has-to-pay-Apple-15.5-billion-for-the-iPhone-says-it-needs-7-billion_id23294

Sorry, meant to put that in earlier.


Thanks for the link. It still doesn't make sense to me, though. The iPhone 4S is the same exact model between all carriers. Why would Sprint pay more for theirs? Could they just be referring to the cost difference between the CDMA iPhone 4 and the GSM version?

Its my understanding that Apple charges the same pricing to everyone for the same devices. The carriers can take it or leave it. Also, it is my understanding that the contract with Apple is just a guaranteed amount of sales. Sprint has to sell the 15.5B of devices, or pay the difference at the end of the contract.

Has any other media picked up on this 40%? Doesn't quite make sense to me.

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#8 EarlyMon

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Posted 05 May 2012 - 08:45 AM

Well, we do know that the original ATT contract was beautifully draconian. ATT thought that they put one over on Jobs, only to find out what the music industry did - the guy was sharp and had good business sense. In the end, Apple came out ahead. I believe, and will have to go back for references, that Verizon got a better deal when ATT's exclusivity expired.

From that history, I don't doubt that each Apple contract with carriers is unique.

And I think that the 40% claim only applies to the US market. I don't know that foreign carriers ever get involved in subsidies.

No argument on the $15.5 billion, note in my earlier post I referred to that as a commitment. And commitments like that count when a company seeks big financing.
Bang!

#9 irev210

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Posted 05 May 2012 - 08:56 AM

Thanks for the link. It still doesn't make sense to me, though. The iPhone 4S is the same exact model between all carriers. Why would Sprint pay more for theirs? Could they just be referring to the cost difference between the CDMA iPhone 4 and the GSM version?

Its my understanding that Apple charges the same pricing to everyone for the same devices. The carriers can take it or leave it. Also, it is my understanding that the contract with Apple is just a guaranteed amount of sales. Sprint has to sell the 15.5B of devices, or pay the difference at the end of the contract.

Has any other media picked up on this 40%? Doesn't quite make sense to me.

Robert via Kindle Fire using Forum Runner


I don't think that's correct either. I've read multiple reports on this. I'll get the numbers on Monday.

I think we should take off our speculation hats until I get the numbers.

#10 Rawvega

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Posted 05 May 2012 - 09:01 AM

http://www.phonearen...billion_id23294

Sorry, meant to put that in earlier.



That was a sloppy piece of journalism on Phonearena's part. They got it wrong, very wrong. If you go to their source at the bottom of the article (Reuters), here's the actual statement: Sprint, which started taking iPhone orders on October 7, said it would pay Apple a subsidy that is 40 percent higher, or $200 more per device, than what it pays for other phones.

http://www.reuters.c...F+Technology%29

So Sprint pays 40% more for the iPhone than what they pay for comparable HTC, Samsung, Motorola, LG, etc. devices. I expect that's true for all carriers. They don't pay 40% more in subsidy than what Verizon or at&t pays. Phonearena should really be A LOT more careful in their reporting.

#11 irev210

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Posted 05 May 2012 - 09:01 AM

Well, we do know that the original ATT contract was beautifully draconian. ATT thought that they put one over on Jobs, only to find out what the music industry did - the guy was sharp and had good business sense. In the end, Apple came out ahead. I believe, and will have to go back for references, that Verizon got a better deal when ATT's exclusivity expired.

From that history, I don't doubt that each Apple contract with carriers is unique.

And I think that the 40% claim only applies to the US market. I don't know that foreign carriers ever get involved in subsidies.

No argument on the $15.5 billion, note in my earlier post I referred to that as a commitment. And commitments like that count when a company seeks big financing.


Yes, there are unique things about each contract. For example, Apple gets to decide where iPhone displays go in Sprint stores. When I walk into a AT&T store, the iPhone is typically in the middle of the store (windows phone is first). When I walk into a Verizon store, it's 4G LTE Android devices. When I walk into a Sprint store, it's the iPhone.

http://www.bgr.com/2011/10/10/sprints-iphone-4s-launch-details-revealed/

I remember when the iPhone was about to launch my local Corporate sprint store closed early the day before to "build" the iphone display right by the door. I thought it was funny.

After seeing Verizon toss Apple to the back of the store... they were not going to make the same mistake twice.

#12 irev210

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Posted 05 May 2012 - 09:02 AM

That was a sloppy piece of journalism on Phonearena's part. They got it wrong, very wrong. If you go to their source at the bottom of the article (Reuters), here's the actual statement: Sprint, which started taking iPhone orders on October 7, said it would pay Apple a subsidy that is 40 percent higher, or $200 more per device, than what it pays for other phones.

http://www.reuters.c...F+Technology%29

So Sprint pays 40% more for the iPhone than what they pay for comparable HTC, Samsung, Motorola, LG, etc. devices. They don't pay 40% more in subsidy than what Verizon or at&t pays. Phonearena should really be A LOT more careful in their reporting.



Thanks for clarifying. This is correct. I'll get some iPhone numbers next week so people have a little more reference material :)

#13 EarlyMon

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Posted 05 May 2012 - 09:04 AM

Guess other countries have their deals, too.

http://tech.fortune....ets-the-iphone/

BTW, this is interesting -

http://247wallst.com...e-apple-iphone/

http://online.wsj.co...1649347572.html

http://www.cultofmac...hone-customers/

Anyway, maybe Sprint was wrangling against this -

http://www.phonearen...service_id29654

Still looking for the ATT contract screwing articles. Google search isn't always my friend, but I used to discuss it elsewhere, so my memory and certainty that a fossil record to back up my claims is clear. :)


Bang!

#14 EarlyMon

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Posted 05 May 2012 - 09:11 AM

OK.

Let's set aside the 40% and which carrier pays what.

Strike it from your mind that I posted it. :)

The rest of the numbers stand on their own merits, and don't need phone arena as a source.

My speculation stands on those same merits.

Simply, I submit the real story here isn't being told.
Bang!

#15 ChadBroChillz

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Posted 05 May 2012 - 11:46 AM

I think the story has less to do with the iPhone and more to do with disgruntled investors who are not seeing profits, while Hesse is getting large bonuses. This is him showing he is willing to sacrifice like the investors do. Hesse is leaps and bounds better than Stephenson.





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