The Best Buy in Wireless

Best Buy (NYSE: BBY  ) isn't interested in waiting for fourth-generation wireless broadband services WiMAX and LTE. The retailer wants to connect laptop and netbook users right now, wherever they are, and they're using Sprint Nextel's (NYSE: S  ) 3G network to do the heavy lifting.

"Best Buy Connect," as the service is called, allows roaming laptop users paying $59.99 per month to consume up to 5 gigabytes of data. The lowest-cost plan charges $29.99 per month for 250 megabytes of data, equal to more than 85,000 emails or 17 YouTube videos. No contract is required, and customers can get technical support via phone, online, or in-store, Best Buy says in a Q&A document at its website.

But Sprint is the real winner here. By giving computer users a glimpse of what it's like to have anytime, anywhere access to the Web, it'll increase hunger for the WiMAX service it's delivering in concert with Clearwire (Nasdaq: CLWR  ) .

At the same time, AT&T (NYSE: T  ) and Verizon (NYSE: VZ  ) face additional pressure to make their existing 3G services accessible to laptop users. AT&T more so than Verizon, in my view.

Why? Look at the page for AT&T's Laptop Connect service. You'd be hard pressed to find pricing on an otherwise crowded page. It's almost as if the company doesn't want to sell you Laptop Connect, which makes no sense with 4G services on the way and AT&T Wi-Fi now freely available through partners Starbucks (Nasdaq: SBUX  ) and Barnes & Noble (NYSE: BKS  ) .

Yet AT&T may not have a choice. With the iPad selling briskly and the controversial and network-challenged iPhone 4 already sold out, AT&T may not have the capacity to provide 3G data service to laptop customers.

So be it. As of today, Best Buy and Sprint Nextel are ready to fill the void. Will they succeed? Take the debate to the comments box below.

Best Buy and Sprint Nextel are Motley Fool Inside Value picks. Best Buy and Starbucks are Motley Fool Stock Advisor selections. Motley Fool Options has recommended a bull call spread position for Best Buy. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team. He didn't own shares in any of the companies mentioned in this article at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. The Motley Fool owns shares of Best Buy and is also on Twitter as @TheMotleyFool. The Fool's disclosure policy is reconnecting with old friends today.


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  • Report this Comment On July 08, 2010, at 10:33 AM, Aryabod wrote:

    This is where Sprint and its affiliate Clearwire will begin to shine. Their allotted 4G Spectrum holdings are second to none. They possess over 150 Mhz of spectrum in the 100 most populated cities in the USA. They are currently only using a fraction of their holdings, however they have plenty in reserve, unlike ATT and Verizon.

    What we need to remember is that Bandwidth is far from being a finite resource. When you understand this you will begin to see Sprint's Wimax strategy much more in focus.

    With the Evolution of Android based phones the playing field has most definately been made level, and in some cases makes the iPhone appear to be technologically behind the curve. Google's untethered OS, Android, is mutating at a pace that even Apple will be hard pressed to emulate. If we are to assume Android's current growth rates are to continue, especially knowing that the iPhone will continue to be tethered to ATT for the foreseeable next two years (ATT's 5 yr. Exclusivity started in 2007) then we can assume the mantel of "trend setting" will come from the Android developers and no longer from Apple.

    Before the end of this quarter Sprint will have two 4G phones active, the HTC EVO and the Samsung Epic. Both these phones should have Android 2.2, Froyo, by the latter part of the quarter. By this time Sprint should have launched its 4G network in LA, DC, NY, Miami, Boston, Denver etc, giving itself a substantial 4G footprint and putting to rest the complaints or excuses used to deride their 4G network. Froyo is supposed to enhance the battery life by as much as 50%, increase processing speeds by as much as 2 to 5 times, support Java and enable the full Adobe Flash.

    ATT's poaching days while brandishing it's iPhone seem to no longer work. Sprint's latest line up, competitive pricing and 4G strategy will surely give it a competitive edge in the foreseeable near future. A glimpse of which should manifest itself with their Q2 2010 results slated for release on July 28.

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