Update: DMoynihan says that the prepaid subscriptions are through Boost Mobile which rules out the Kindle being the source of 666K new subscriptions.
GigaOm has a great post on the wireless carriers making great profits -
The rich mobile carriers got a little richer in the third quarter, as the nation’s top two operators increased their leads over the rest of the field.
How is this relevant to the Kindle and other eReaders?
Its mostly relevant in terms of whether wireless carriers will start subsidizing eReaders to add/protect their subscribers and their revenue.
It also makes you wonder whether it’s time Amazon allowed customers the option to get a full price Kindle or a subsidized Kindle.
Revenues and Profits of Wireless Carriers
This is courtesy GigaOm (and not verified) -
- Verizon Wireless – $15.8 billion revenue, $4.47 billion operating income. 1 million subscribers added.
- AT&T – $13.65 billion revenue, $3.4 billion operating income. 2 million subscribers added (largely thanks to the iPhone).
- Sprint – $6.9 billion revenue, $448 million operating income. Lost 135,000 subscribers. Net Prepaid Subscribers added: 666,000.
- T-Mobile – $5.38 billion revenue, $417 million operating income. 63,000 subscribers added.
In comparison, look at the big tech companies -
Microsoft – $3.57 billion profits on $12.92 billion revenue (excluding $1.47 billion deferred revenue). Apple – $1.67 billion profits on $9.87 billion revenue. Google - $1.64 billion profits on $5.94 billion revenue. Amazon – $199 million profits on $5.45 billion sales.
It certainly takes me by surprise to find out that Verizon and AT&T are way more profitable than Apple and Google. Only Microsoft has comparable revenue and profits.
In some ways using Free as a Strategy hurts Google too. In its rush to cut everyone else’s profits its hurt its own chances of making money from areas other than Search.
The wireless carriers do a much better job of letting everyone profit. All 4 of the wireless carriers are doing well – the top 2 are both excelling.
More eReader related thoughts
There are a lot of interesting numbers in those revenue figures –
- AT&T added 2 million subscribers thanks to the iPhone.
- The next great eReader could have a similar impact and wireless carriers will probably start looking at subscriptions soon. The Apple Slate? Dell has already said its Dell Reading Tablet will be subsidized.
- Look at the number of subscribers – 33.4 million for T-Mobile, 48.3 million for Sprint, 89 million for Verizon, 81.6 million for AT&T.
- Perhaps there’s a way to tap into those subscribers for ebooks and ereaders - beyond the obvious method of subsidized ereaders.
Wonder how long it is before AT&T starts offering subsidized eReaders? They already offer subsidized netbooks.
Also, if subsidized eReaders appear Amazon would be forced to introduce the option of subsidized Kindles.
Filed under: kindle Tagged: | kindle sales estimates
I think if you look a little closer at the numbers, you’ll find that the prepaid Sprint’s talking about there are the phones sold through its Boost Mobile subsidiary (which added 764k users at an ARPU of $31 in an earlier Gigaom post).
Sprint is becoming an even bigger player in prepaid phones with its acquisition of Virgin Mobile, expected to close by the end of the year, and likely to boost ARPUs even further (VM users do more texting and such, paying for bit/splice plans, like may 200 texts a month for $5).
I’m afraid none of these numbers have anything to do with Sprint and Kindle.
Disclaimer: VM was under a buck this time last year, and, though I don’t usually brag about penny stocks, I got in right before it dropped another 30%, having held since.