During its first quarter earnings call, Sprint Nextel touted that sales of the Amazon Kindle e-reader device drove the majority of its 394,000 wholesale additions. That's a strong number, except when you consider that the average revenue per Kindle device is just $2 per month. This is compared to a typical Sprint postpaid subscriber ARPU of $56 per month.
Nielsen analyst Roger Entner predicts that because Kindle is included in Sprint's overall subscriber numbers, the carrier will see pressure on its ARPU numbers going forward. This bad news/good news scenario isn't just going to impact Sprint, however. Most U.S. operators are currently trying to grow their business through embedded wireless devices.
These embedded wireless devices--navigation devices, digital cameras, e-readers and others--are connected to the wireless network but will not garner the same high ARPU as a traditional postpaid customer. As the embedded wireless device model evolves, many operators are considering breaking these numbers out differently so that they don't impact their traditional ARPU measurements. However, the embedded wireless area is still in its infancy and therefore the business models are in flux.
FierceWireless is hosting a virtual event on Embedded Wireless Devices June 9 where we will be discussing this issue and more. Speakers include Glenn Lurie of AT&T, Maurice Thompson of Verizon's Open Development Initiative, John Horn of T-Mobile USA and others. To register for the event, click here.
- see this blog post
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