Amazon's Kindle to Benefit AT&T vs. Sprint?

Posted by: Olga Kharif on October 23, 2009

It looks like Amazon may be dropping Sprint Nextel as the primary wireless service provider for its Kindle e-reader device. Its new international Kindle, which can download e-books in the U.S. and more than 100 other countries, is powered by AT&T. While Sprint continues to support and sell Kindle DX, that device, which features a larger display, is $230 more expensive than the international Kindle and, thus, is likely to enjoy lower sales. And some analysts believe the DX may soon be phased out.

That’s bad news for Sprint, and great news for AT&T, Sanford C. Bernstein analyst Craig Moffett writes in today’s note. He figures the Kindle will drive 1 million Kindle users to AT&T — net subscriber additions that Sprint will lose out on. Moffett estimates that Sprint makes about $5 per each subscriber addition and $2 per every e-book downloaded onto Kindle over its networks. That’s not very much, but still; Sprint, which has been bleeding subscribers for months, need every additional customer it can get. I’ve not heard back from Sprint or Amazon.com yet.

Reader Comments

Arv

October 25, 2009 1:12 AM

I've been a Sprint loyalist for 8 yrs and though I've never had a major issue with them or my cell, I understand why people have bailed. I think every carrier will provide bad service from time to time and poor coverage. Sprint has been doing very well the last few yrs and with their simplistic pricing and new phones, the underdog will eventually rein over carriers who thought they are invincible. Just because Amazon drops Sprint in favor of AT&T, doesn’t mean Sprint is a bad carrier.

ED

October 26, 2009 7:52 AM

CAN ANYONE SAY "MONOPOLY"

Mike

October 26, 2009 10:06 AM

The ability to work overseas was the limiting factor from a Sprint perspective due to Sprint's network. I'm curious as to how Kindle will do on ATT's network given the iPhone complaints on it. I think it's risky.

PJ

October 27, 2009 11:27 AM

I, too, think that Amazon's customer service will be swamped with complaints about AT&T's lack of coverage. If you go to the Kindle discussion boards, you will find customers who owned Sprint Kindles and returned them within 30 days for the AT&T Kindle and regretting that decision. Now they cannot get a Sprint Kindle. If I wanted to make money, I could hold on to my Sprint Kindle another 6-8 months and sell for a good profit. Amazon does not want this customer service nightmare, but I'm sure they believed AT&T's line about their superior network.

Anon

November 2, 2009 12:25 PM

I agree with Arv.
I've had Sprint wireless service for about 11 years now and they have had their problems but last few years they have been top notch - never drop a call.

My friends with Iphone on ATT complain all the time about AT&T service. It sucks.The only reason why they are doing well is because of Iphone, in my opinion

Thomas Harr

November 3, 2009 7:18 PM

Sprint's CDMA and IDEN networks are performing at best ever levels. People upgrading from Sprint's Kindle to AT&T's Kindle will soon regret their decision.

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Bloomberg Businessweek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, and Douglas MacMillan, dig behind the headlines to analyze what’s really happening throughout the world of technology. Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.

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