June 18, 2008 / 2:24 PM / in 10 years

Sprint prices iPhone rival Instinct at $130

NEW YORK (Reuters) - The Instinct, Sprint Nextel Corp’s answer to the iPhone, will sell for $130 after rebate, Sprint said on Wednesday.

Dan Hesse, president and CEO of Sprint Nextel, speaks during a keynote address at the CTIA Wireless convention in Las Vegas, Nevada April 1, 2008. The Instinct, Sprint Nextel Corp's answer to the iPhone, will sell for $130 after rebate, Sprint said on Wednesday. REUTERS/Steve Marcus

Sprint, which has been suffering from steep customer losses, has said it will spend more than $100 million to market the touch-screen Instinct, made by Samsung Electronics, in hopes the cellphone can help turn around its fortunes.

This was about three times the marketing budget for the biggest phone launch in 2007 by Sprint, which — amid customer service problems — has been bleeding subscribers to rivals such as AT&T Inc and Verizon Wireless, a venture of Verizon Communications and Vodafone Group Plc.

Apple Inc’s iPhone is sold in the U.S. exclusively for use on AT&T’s network.

Analysts say it will be tough for Instinct to compete with a new, high-speed iPhone model due to go on sale for $199 on July 11.

Sprint, the No. 3 U.S. mobile service, said the $130 price for the Instinct includes a two-year service contract and a $100 rebate by mail. First announced in early April, the Instinct is expected to go on sale June 20.

Sprint CEO Dan Hesse, however, downplayed the competition at a telecommunications industry conference in Las Vegas.

“One competitor has announced a new 3G device. But keep in mind that the 3G coverage could be relatively small, so the user experience could be disappointing to many,” he said in a speech at the NXTcomm conference on Wednesday.

He also said Sprint had an edge over rivals in developing WiMax, an emerging high-speed wireless Internet technology. Sprint and top U.S. cable companies are investing in a venture with Clearwire to build a network based on WiMAX.

WiMAX promises to blanket entire cities with Web access for laptops, cellphones and other consumer devices at fast speeds.

“WiMAX and 4G is wireless at rocket speeds,” he said.

“We believe we could have a two year head start over the competition in true wireless broadband ... at landline type speeds.”

Reporting by Franklin Paul, Sinead Carew, and Ritsuko Ando; editing by John Wallace, Phil Berlowitz

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