The winner for the most expensive table stake goes to…Sprint

Tom Dougherty, CEO – Stealing Share

5 October 2011

But it was a must-have: The iPhone

Looking at different markets, the bare minimum needed to compete varies. Sometimes, the minimum can be efficacy or FDA approval in the medical community, for example, or it might mean providing ample battery capacity for mobile electronics. They are all aspects that are not optional to compete but, if you are looking for a long-term presence, are required. Sadly for Sprint, the market of wireless providers has one of the most expensive table stakes– the iPhone.

“The playing field is now level and Sprint is in a position to seize that opportunity using brand messaging that is meaningful and says why it has the iPhone.”

SPRINT BRAND LOGO

Sprint just announced it will be purchasing 30.5 million iPhones over the next four years, a commitment to the tune of $20 billion. While Sprint’s stock has been taking a hit for this recent move, my response to those selling their Sprint stock is that, to compete, this was something Sprint needed to do.

Brand messaging is vital, even concerning table stakes. By the same token, while brand provides the reason “why” a company does everything, actions must reinforce that “why” and fulfill the brand promise or the brand becomes meaningless. What also muddies that “why” is when the brand fails to meet the bare minimum to compete in that market.

The iPhone only on AT&T was a differentiator. But once Verizon began to carry it, all the equity AT&T held was lost and it moved from a differentiator to a table stake.

Under these circumstances, I would say that Sprint has made a correct move by including the iPhone in its portfolio. The playing field is now level and Sprint is in a position to seize that opportunity using brand messaging that is meaningful and says why it has the iPhone.

Competing to increase market share through monthly minutes allowed or by data packages offered is short-term strategy. Now, while differentiators are for the most part flat in this market, is the time for Sprint to build preference by saying something emotionally resonate about the “why.”

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