Come a week from today, Sprint will have a dilemma. The Samsung Instinct isn’t out yet, but all of Instinct’s selling points will be equalized. A second-generation Apple iPhone may actually beat Instinct to market, and won’t feature Sprint’s horrid plan limitations.
Oh, and it may be cheaper too. But, I’ll tell Sprint how to get out of the problem.
The Instinct was all the right ideas… all at the wrong time. In fact, I’ll go out on a limb and say, nobody will see Instinct in a positive light come next Monday. Not you, not me, and certainly not behind closed doors at Sprint.
Here’s why. Even if you take iPhone’s most minimal announcements come next Monday, and the new iPhone conquers Instinct in just about every respect.
The new iPhone will have 3G. In fact, compared to Instinct, it’s faster. Instinct lacks EV-DO Rev A, meaning that the HSPA radio in iPhone will be able to run circles around Instinct.
Correction: Bad information at first impressions tend to stick. At the launch event, I was told Instinct was EV-DO Rev 0. It is indeed Rev A, and I apologize for the confusion. However, the point remains the same; the HSPA Infineon chipset in the second-generation iPhone is faster than EV-DO Rev A, when sufficient bandwidth is provided from the tower. And, AT&T is upgrading their network right now to supply that bandwdith.
Instinct also looks bad in the wake of a plan choice. Sprint has decided to require the confusingly-named Sprint Everything plans, which include the Simply Everything plan, but not just the Simply Everything plans, also the other Sprint Everything plans. Have a headache yet?
In reality, this motive was to control availability. By making them only available on a handful of new-generation plans, most early adopters will be new subscribers. After an exhaustive prodding and researching of sources at every level in Sprint, this is the only reason we can find for Instinct’s plan limitations.
For a phone that’s meant to stem the tide of iPhone converts, that’s a losing scenario.
And, wait, there’s more! Sprint was hoping to peg the phone within $50 to $100 less of iPhone. But, expectations are that at least one iPhone variant may actually hit the $200 price point. That’s especially clear if Apple relaxes requirements to not subsidize their phones, inserting a $150 discount via AT&T new two-year agreement.
What does this add up to? A nightmare for Sprint. And, that’s why you’re hearing so little about Instinct right now in terms of release. Sprint made the smart move to hold off on pegging price point and release info until after Apple’s WWDC expo, where iPhone will be upgraded.
So, what should Sprint do? Simple, take the hit and price Instinct down to half of whatever the low end iPhone costs. These customers are high ARPU users, and Sprint has a hot product that’s going to take a hit. Instinct is not worthless. It is however now a budget offering.
The one problem Sprint will have with this though, is it will tear a hole in the pricing of the rest of Sprint’s phones, which certainly aren’t all free after rebate. My advice would be to price down phones that simply are outpaced by Instinct, but leave phones that have some form of comparative advantage to Instinct in the lineup (PDAs, smartphones, QChat phones, iDEN, etc). The result? A few phones will get their prices slashed similarly, but the lineup remains intact.
And, finally, tout Instinct as a budget iPhone, with identical feature sets. People know Instinct is an iPhone wannabe. Don’t hold it to the same standard. Instead, argue that it does everything the best iPhone does, at half the price of the weakest iPhone. Keep it simple, show it in action, tout Sprint exclusives (Sprint TV), and leave it at that.
Good luck Sprint, you’ll need it, but Instinct has a clear niche that can be gained from if targeted… and priced… properly.