We recently had a chance to speak with Sprint’s Vice President of Product Development, Fared Adib, about Sprint’s upcoming devices, product strategy, and a whole lot more. Interested in Sprint’s thoughts on unlimited versus capped or throttled data? Wondering about Sprint’s plans for product differentiation in 2011 and beyond? Curious to know if Sprint will offer RIM’s new BlackBerry Bold 9930? Hit the break for our full in-depth interview with one of the industry’s driving forces of innovation.
BGR Interview is a series of interviews and conversations with executives, influencers, tastemakers and innovators, covering the mobile and consumer electronics industries.
First up, what phone is in your pocket? I think that’s a great question to kick it off!
[Laughter] Haha, OK. That’s a good one! I have the Nexus S 4G I am carrying right now. And, actually, I carry more than one phone at a time so it’s actually an unfair question — I’m also carrying an EVO 3D.
Great. Are 3D devices a big part of Sprint’s strategy going forward, would you say?
You know, our take on 3D is that, it’s probably a respectable part of our portfolio just in proportion into the market size of how 3D is taking off in the rest of the technology world. I think we kind of see 3D as a differentiated service that helps us make these phones stand out a little bit more. Also, they kind of follow a trend we’re seeing on TVs and a lot of mobile devices, that 3D is going to be another growth curve for generating interest in smartphones beyond what you see today. I’m not going to say that every phone we’re going to carry is going to be 3D, but I do think there is a place for it, especially when you talk about iconic phones. It’s another feature I think you’re going to see become as common as the type of 4G connection you have, or the size of the screen and things of that nature. It will become more and more kind of an added feature that you’re going to see over time in phones.
What key features do you think that U.S. smartphone users look for in a phone? What do you think the biggest draws are in Sprint’s smartphone lineup and what do you think people really are looking for right now?
Well, I think it’s a combination of things. When we first launched the EVO, we really sat down, and I think something we did with the EVO that not a lot of carriers have done in the past was we really co-developed that product with HTC. And by that, I mean typically the way carriers pick a phone is you sit down with an OEM partner and you’d see a portfolio and do RFPs and get some kind of requirements out there. Then the OEMs would delver to you a model and then you’d evaluate it, and then at that point you’d agree on a price and a volume and some colors and things like that and get it out to market. But the way we approached the EVO was, we really wanted to sit down and say what would a 4G network get you? And, what would the experience be like that we want to deliver? It would be more multimedia; more speed gets you more content and more bandwidth faster to the device, so, you really can’t take a standard device and apply all those laws to it. So, you really have to have a bigger screen if you’re going to watch more content, and you have to have a faster processor to process it.
So, a lot of what we’re doing right now is we’ve really become more like a computer company, where we’re evaluating the total sum of the parts of the devices and sitting down with our OEM partners and really kind of specifying specific components for the device. So, things like the processors: we sit down and we really take note of what the best processors are in the roadmap for when we want to deliver this to market, and what kind of displays. What we’re finding is — I’ll use the EVO again because it’s kind of like our flagship franchise — when you look at products like the EVO, you see that it’s the sum of the parts that made it great. So, it was the bigger screen, it was the faster processor, the better display, and the fast network all combined that really make people say, “Hey, this is a great device!” Then we added some unique features like a kickstand and things like that, and it just adds icing on the cake. And I think that’s what we’re trying to replicate time and time over is, you know, you need to have a great processor, you need to have a great display, but you need to have some kind of unique feature on top of that really makes this thing stand out from other things on the market.
Sort of adding on to that, while you guys differentiated with the EVO and were the first in a lot of ways with a 4G smartphone on a 4G network, Android phones in general seems to be almost stuck in a cycle of similar devices that just feature spec-bumps. Do you think this is a sustainable model apart from that flagship device that you guys offer?
Well no, I don’t think it’s sustainable. I think what happens is that these kind of innovations only come once in a few years, and typically, you know, for anybody who’s done product management or product development, there’s this great dilemma called the innovator’s dilemma. What it is, is that in all these products have an S-curve life cycle. If you were to graph it out, it’s kind of like this growth curve and you’d see this line grow, and then it kind of stalls at a certain point because innovation can be replicated at some point. And then what you have is a lot of the same stuff, and then you have to find something else to innovate again and then you get this kink in the curve that creates a new growth cycle, which makes it look like an “S”.
You know, what’s happening right now is that once we launched the EVO it was really one of the only devices on the market like that, with 4G and a 4.3-inch display, and so on and so forth; you know the specs better than anyone. But when you look at it, that’s only sustainable because quickly after that you start seeing all kinds of other devices, like different types of DROIDs from Motorola, other products from HTC, Samsung, and so on. Now you’ve got a lot of products that are similar, and every month there’s one that comes out that has something that is one-upping the one that came out before it. This is very similar to what happens in the computer industry. It’s not a sustainable model, and so over time, what you have to do is you have to look at where the trends are and how you can truly differentiate. Luckily, we have tried to differentiate on different fronts: one is by having a breadth of a portfolio that serves a lot of different types of users, but two, by also trying t0 drive some other value-added features that people may want like Sprint ID, that we think is a value-add to the customer on top of Android to help to customize it for those that aren’t that technically capable of doing it that want something prepackaged.
The other is price plans become a big way of how carriers differentiate. You know our unlimited pricing is another value-add, and when people all have pretty much the same device, then the next evaluation point comes down to how much do customers have to pay a month for this service? And is it a hassle free service or are they paying by the bucket? I think that in combination with some of the other elements, like the network and the reliability of it and speeds, I think that all of those things cumulatively is how you differentiate. So it’s the total value proposition versus just any one key element or technological feature, because those things can be pretty easily replicated, but the sum of the parts is some what harder to replicate and that’s where we have been tyring to focus.
The other thing I’ll add is that we’ve been taking some chances. A lot of our competitors try to play it safe. What we have been trying to do is take some chances and do some products that may not be everybody’s cup of tea, but they may have a place in the marketplace to help drive innovation and competition. So we did the Echo, which a lot of people, if you were to ask them if they need a product like that, would probably have said “no.” But you sometimes have to just buck the trends and take some chances, and go out there and do some things that haven’t been done before, and hope that those leanings help drive more innovation, more competition and get people thinking of how to build a device differently than just putting another 4.3-inch screen in an all black chassis.
What you said about differentiation makes a whole lot of sense and adding on to that, you have the EVO 3D which distinguishes itself with a 3D display, and the Echo obviously has two screens. What other features should we look for in Sprint phones that might set them apart from the competition down the road? What’s the next innovation out of Sprint?
Just to touch on the ones you just said, I’ll kind of elaborate on it then answer your question. With the EVO 3D, one of the things that we really want to point out with that is if you take a look at it and take the 3D away from that product for a second — if you look at every feature that product has — it’s typically best in class. It’s got a qHD display, its got this dual-core 1.2GHz Snapdragon processor, and it’s got a lot of core ROM and RAM memory in it. Then you throw the 3D on top of that, and it’s just an added benefit, right? So if I was to look at that compared to an ATRIX for example, or a BIONIC, I’d say you know what? I get more for my money here. For the same amount I’m paying for these other devices, maybe I should just go with this EVO 3D. And whether I use the 3D or not, I’m going to buy it anyway.
There are other value-added features, and I think some of them go beyond hardware; I think some of them are in the software realm. I think things we’re doing that are really innovative are, for example, we have this relationship with Google on Google Voice, and that was another thing where we took leadership and we said look, this is kind of something a lot of people don’t know about. It’s really more of a geeky tech trend; people who have Google Voice feel special because this is something unique that’s not out in the marketplace en masse. And we thought, well how do we bring this to the masses and how do we do it makes this easier for people to adopt? Traditionally, the way Google Voice works, you have to go and get your own number from Google and it’s very hard for a lot people who don’t want to displace their number they have with their carrier. So we said why don’t we just take that out of the equation, and why don’t we just allow people to make their Sprint number their Google Voice number without porting it and making this a difficult process? So that’s what we did. We kind of looked for a unique value-added thing that a carrier could do there, and we added it into the equation.
I think those types of software and services are going to continue to be how how people are going to look at the same product and say, well I can buy this anywhere but these guys at Sprint offer this Google Voice integration that I can’t get at Verizon and I can’t get at AT&T, so that’s where I’m going to go and get my product. And I think, again, it’s the sum of the parts that makes the difference and the value proposition.
You know I think, compared to our competition, we’ve been doing a lot more innovative things like that are not just playing it safe. We’ve done SprintID, which was an innovative feature and nobody else in the industry done anything like that. We’ve done Google Voice. We did Echo, we did EVO, and we did EVO 3D. We’re also doing things like the green products we just announced — it may not be something a lot of BGR readers are going to get too excited about, but there is a market of people who are socially conscious out there and want to respect the environment, so we’ve produced this Android phone that’s touch, QWERTY, that can be at an affordable price point that maybe the teenagers and the young kids can buy, that also helps our environment. So there are other areas like that where we’re also taking a leadership position that I think kind of differentiates us from the competition out there.
Absolutely. Also talking about value, you guys have a commercial running where CEO Dan Hesse talks about unlimited data plans which are free of metering and throttling. How important do you think unlimited and unthrottled data is to the smartphone experience?
Well we believe very strongly in this one, and this is more of a principle than anything else. The reason that unlimited data plans were originally brought to market — and we were really the innovators; we led, and brought the first unlimited data plan to the mass market — was that we saw a dilemma. The dilemma was the way price plans worked, customers had too much to choose from when they bought smartphones. They had to pick their data plan, their messaging plan, their voice plan, and then any other add-on they wanted… if they wanted TV they had to buy a package for that. It just became very complex. And what we found is that it also limited how people were using their smartphones. So they’d buy these big powerful phones but then they would be using some of these functions in a very limited fashion. At the end of the day, they would become glorified messaging devices, or all-talk devices. We said the way to really change that is to eliminate the decision-making and the fear of running over on the amount of data you use, and the amount of messages you send, and the amount of talking that you do on the phone.
That is why we introduced unlimited, and we found that it drove down calls to our care departments because lots of times ,people would run over on their monthly bills and they’d really get scared and say hey, I need to change my plan; it’s not the right plan for me. And people were very fearful of using things because they’d run over on their bills. Once you took that off the table, it made it easier for the end customer and it made it worry-free for them on how to use these phones. It also raised the adoption of things like services, downloading apps, and utilizing the network. That’s really, at the end of the day as a carrier, what you want to do. We’re very big believers in that because we want people to continue to buy these phones and use them for what they are built for so they are happier. And we think a happier customer is one that’s going to stay with us longer.
I think if you go backwards and you start limiting people’s experience and charging them more for those experiences, and going back to the way things used to be — I don’t know about you but a lot of people don’t know when they have used a megabyte, or two megabytes, or a gigabyte of data — it’s just hard to throttle that. And metering and throttling your experience, we believe, is just going to get people back into this mode where they’re just going to be paranoid about these services and they’re just going to use them less and therefore they are not to be as happy; and they might not buy these high end devices. We think that all these things go together, and if you don’t have the right price plans as a carrier, you may actually see a negative result.
Would you say that unlimited data is a part of Sprint’s smartphone strategy moving into 2012 then?
Yeah, we’re going to try to keep it around as long as we can. What most people don’t people realize is that there is a cost here with us doing this, and we are definitely seeing a trend where people are using more and more data. Like I said we’re not against that, but what happens is that over a certain period of time if poeople abuse the unlimited data policies — if everyone constantly uses a lot of it — then it becomes more expensive for us to maintain the network. So you do have to look at that and balance that out as a carrier, to make sure you can still generate revenue to offset your costs.
That’s really the basics of what we’re trying to do. We’re not just trying to add a lot of different fees on to try to nickel and dime people. But what we are trying to do is make sure, as more people using things more in general, that we can offset those costs by at least generating a little more revenue to make sure we can sustain it. I’m not saying were going to raise prices anytime soon or anything like that, but I do think we’re constantly looking at it and we’re constantly managing the network. As long as we can, we’re going to keep the unlimited plans around. It’s something we believe is core to our principles of driving innovation and driving people to want to use these devices.
When I think of unlimited messaging, or data, my mind always goes back to BlackBerry. It’s just the device I always put in that category. How is Sprint’s relationship with RIM?
You know, it’s great. RIM has been a great partner of ours, and we’ve got a lot of great partners by the way. Microsoft, for example, has been a partner of ours for 10-plus years. RIM has been a great partner of ours for the last 10 years. We also have a longstanding relationship with Palm / HP. We’ve got a lot of great partners in this space and I think RIM is one of those where we have always stood by them. There has always been a market segment for the RIM product and we also believe there always will be some level of market segment for that product. There is an innovation value proposition they deliver to enterprises and to some consumers that is hard to get away from.
They’re making great products. Right now you see that they are losing some market share to some of their competitors, but I’ve seen this story play out several times over. There hasn’t been anyone in this industry that you’ve seen from a platform standpoint, that hasn’t lost market share once they have been on top. It’s very cyclical. Sometimes the company that’s on top this year isn’t on top next year and the company that’s on top next year isn’t on top the following year. I never count any of these platform companies out. Microsoft had its up and downs and they seem to be coming back — fairly moderately right now, but I think it’s still early in the game with the Windows Phone 7 platform. I think everybody has had those ups and downs, and RIM is one of those where we’re still a big believer in them and they are still a big part of our portfolio.
BlackBerry World was last week in Orlando and the BlackBerry Bold 9900 / 9930 was announced. There were no carriers announced for the CDMA unit, are there plans for Sprint to carry it?
The bottom line is that we have a good relationship with them; we’re one of their key partners around the world. They’re a platform company, and whenever they offer a platform they typically offer it to all carriers, so I’ll just leave it at that. It’s like the Curve… it’s a global platform. Bold has also been a global platform. It’s very rare that they do something that’s unique to just one carrier and if they do that, they typically don’t announce it in a global event like that. So I’ll just leave it at that, and you can extrapolate form there.
Final question… You touched on Microsoft and how they are coming back now with Windows Phone 7. What do you think about the partnership with Nokia and Microsoft? Do you think that will result in attractive devices for Sprint and your subscribers?
Yeah, I think it’s still early. I think these relationships, when they get announced, they obviously get a lot of press but again, I don’t count any of these companies out. Sprint is the No. 3 carrier in terms of size… we never count anyone out. You always want to maintain good relationships with everybody in the marketplace and I can tell you, you have to kind of look at people who are No. 3 in other industries, or No. 4 or No. 5, and you have to say don’t count them out either, because every time Sprint’s been counted out, we’ve proven people wrong. You have to think that very well-funded companies like RIM, Microsoft and Nokia, who have very good presence and market share in their respective categories, I think you can’t count them out either. I think the Microsoft / Nokia announcement is a very interesting one, but it’s not really a surprise. If you look, there’s a lot of synergies between of those companies. For them to unite in that way, I think, makes a lot of sense.