From several reports leaking out Wednesday night it is becoming apparent that Clearwire’s days of having its own retail brand are at the very least numbered, if not quite yet at zero. While we are guessing there will be more real details (and perhaps some more executive departures) discussed at both the upcoming Sprint earnings call on Feb. 10 and the Clearwire call on Feb. 17, the switch to a wholesale-first strategy makes a lot of sense for Clearwire since it technically has already happened, when wholesale numbers surpassed Clear-brand retail customers during the third quarter of 2010.
While we’re going to wait to dissect the shift until after real confirmed details arise, we can take a quick look back at two developments that are most likely the chief reasons why the Clear brand strategy got submarined: The success of the Sprint 4G smartphone introductions and the introduction of mobile hotspots, especially Sprint’s hybrid 3G/4G Overdrive hotspot as well as the hotspot feature in the 4G phones.
Though Sprint and Clearwire had previously been fairly frank about not seeing any competition between brands, most of that talk occurred before this past summer’s introduction of the first real 4G smartphone, Sprint’s HTC EVO 4G. The buzz winner at CTIA translated into a sellout success at the retail level, clearly surprising Sprint and its supplier since the company ran out of EVOs to sell not long after the introduction.
When the Samsung Epic 4G followed with more smashing reviews and more robust sales, it became apparent that the WiMAX team had a winning entry in the smartphone marketplace — but it also meant that introducing a separate Clear-branded phone wouldn’t make much sense, especially if Sprint had to front Clearwire the money to help subsidize the devices. Had the WiMAX smartphones been slow to take off, an additional brand might have helped find more customers; but with a hit on its hands it’s hard to blame Sprint for wanting to put the focus behind the train that was already moving.
The introduction of the Sprint Overdrive 3G/4G hybrid hotspot last year was also a bit of a blow to the Clear brand — if you could get all the functionality of a Clear modem in a device that also gave you access to the Sprint 3G network, why would you choose anything else? Double down that question when you include the hotspot capability inside a flashy smartphone — like Sprint did with both the EVO and the Epic — and you have a cake-and-eat-it-too combination that made the Clear brand’s device lineup look a little flat.
What are the possible options ahead for Clear as a retail brand? It could morph into a prepaid-only outlet, taking the Rover Puck strategy and expanding it as something much different than the 4G offerings from Sprint itself. With store leases paid for and more than a million customers locked into two-year contracts it probably doesn’t make sense to shut Clear down completely. But it now looks pretty clear that the burgeoning wholesale business is going to become Clearwire’s main business, going forward.