Sprint Nextel Upstages Apple

Well, the first serious impact from the "iPhone effect" just hit -- Sprint Nextel (NYSE: S  ) has launched a combination mobile phone/music player from Samsung, fittingly called Upstage, designed to steal some thunder from the personal-media-player giant.

In a direct play against Apple's (Nasdaq: AAPL  ) deal to launch its much-anticipated iPhone with AT&T's (NYSE: T  ) Cingular in June, Sprint Nextel is hoping to grab an early share of the market for those consumers who want to integrate their media player with their mobile phone.

Available this month, the Upstage device has screens on both sides -- one for making phone calls, and the other, larger screen on the flip side for managing music and media. It's a full-featured device, with an integrated camera and access to Sirius (Nasdaq: SIRI  ) satellite radio and Viacom's (NYSE: VIA  ) VH1 and MTV channels.

The media phone has had mixed reviews so far, but it's already broken through a few barriers necessary for the integrated devices to really be successful. First, it's priced right. With a contract commitment, the Upstage will only lighten the pockets of teen music maniacs by $150 -- compared to the $499 expected for the cheapest iPhone. More importantly, full song downloads done over the air are priced at the iPod-standard $0.99. Previously, Sprint and other wireless carriers demanded $2 or more per song for over the air downloads.

As always, there's a catch -- to get $0.99 songs, users must sign up for one of Sprint's Data Service Packs, starting at $10 per month. Still, consumers are much less likely to balk at this deal, especially when they compare it to Sprint's current $2.49 price for songs from its library.

Sprint's first foray into this area probably won't measure up to the iPod standard for ease of use, but the economics of the offering are encouraging. It will be interesting to see whether other device makers such as Motorola (NYSE: MOT  ) or Nokia (NYSE: NOK  ) can develop products that could prevent Apple's iPhone from dominating the wireless media-phone market as greatly as the iPod has ruled the media-player market.

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Fool contributor Dave Mock gets upstaged by his kids on a daily basis. He owns shares of Motorola. Dave is the author of The Qualcomm Equation. The Fool has a disclosure policy.