Could it be that the Apple
Sprint Nextel
Of course, without seeing actual numbers, this could be a manufactured shortage. But Sprint claims that the initial quantities ordered were the largest of any other next-generation handset. And the company is pushing a huge marketing budget -- at least $100 million -- to make the Instinct a winner. So I don't doubt that the Instinct is captivating iPhone holdouts or Sprint Nextel subscribers who were anticipating the release.
In this Fool's mind, though, two things made the launch of Instinct a success: a $130 price and the Apple iPhone. Without one or both of these, the Instinct would still be a really cool device, but sales would be along the lines of any other attractive Nokia
Offering lower-cost, subsidized devices is a killer strategy that successfully brought once-pricey Research In Motion
But because this is not a zero-sum game, the Instinct will not displace the iPhone. This is a whole new market demographic opening up, and the carriers are paying dearly in subsidies to grab hold of subscribers. No doubt Sprint Nextel is taking a big hit up front on the Instinct -- just as AT&T is with the new iPhone -- but it certainly will help the company keep and grow subscriber rolls. But only time will tell whether it will help Sprint Nextel -- and investors -- score big.
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