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Instinct will sell out by week’s end, analyst says

Already Sprint’s fastest-selling EV-DO handset, the iPhone competitor is on track to sell out

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Only a week after its commercial launch, the Samsung Instinct has become the fastest-selling EV-DO handset in Sprint’s history. With many stores having already sold out of their stock, Ranjan Mishra, wireless industry management consultant and founder of ESS Analysis, is confident the entire inventory will be depleted before the week’s end – good news for the country’s third largest carrier.

“It’s a good thing to happen because it validates that there is good demand for this,” Mishra said. “Customers like to feel like there’s that demand and see across the group that they are not the only one purchasing it. If they are going through that [sold out] phase, it will see more demand coming from that rather than a negative impact.”

The Instinct didn’t attract the length of lines and over-night campouts that Apple’s brand recognition drummed up around this time last year, but the Samsung handset has been successful in its own right. According to Sprint, the June 19 launch to Sprint customers only broke records for an initial launch of any of the carrier’s products. After it was opened up to the general public on June 20, its first week on the shelves shattered Sprint's own record for the first week of sales for any device. The service provider has not released sales figures, but said that the demand was so high for its first EV-DO Rev A consumer device that many locations already sold out. Sprint and Samsung have stated they are working to rebuild the inventory.

The question will become if Sprint can keep up that momentum as the 3G version of the iPhone launches in early July. Mishra, for one, believes there is room for more than one handset of this nature on the market. While the iPhone started the movement to user-friendly, touch screen multimedia handsets, the customers for the devices are not one monolithic segment. Certain attributes spark the interest of different consumers and that can come in many different form factors and flavors. This is only the beginning, he said.

“As we move forward, this segment will get more competitive,” Mishra said. “There will be more diversification and more customer aligning themselves distinctly with a few attributes and a few brands.”

The Samsung Instinct debuted with a price tag of $129.99 with a two-year contract after a $100 mail-in rebate, $70 cheaper than the $199 3G iPhone. The price differential between the two is certainly not insignificant either, Mishra said. He anticipates that price will continue to be a dominant factor in driving consumer demand.

“It depends on what gives you more excitement and whether you want to pay $70 higher or less,” Mishra said. “That is the real difference. People will go after the phone they want depending on the price.”

The initial success may have a lot to do with Sprint’s marketing too. Leading up to its release, Sprint played up the price difference between the handset and the iPhone, and in a campaign called “Sell out,” offered customers $20 to feature their Instinct in a YouTube video. A $10,000 grand prize goes to the customer who makes the best home video using the handset itself.

One week in, Sprint said the most use for the device has been in email access, web browsing and GPS navigation with Live Search for Sprint providing access to directory information on the go, interactive maps and one-touch click to call access. The Instinct offers the ability to share pictures, watch live TV and listen to commercial-free radio. Mishra said that Sprint is targeting more data savvy users who are buying the phone for that purpose, rather than just a cool looking handset.

“Your phone is only as good as the service plan you are on,” Mishra said. “Sprint’s plan allows you to do a lot more data stuff while AT&T and Verizon are limited to the talk plan. It is contradictory – if you are buying a phone like iPhone, it’s probably for data things and not just calls. Sprint has unlimited plans and better unlimited data than any other carrier today. Combining that with the hardware price differential, I think if you look at the whole map, the Instinct will come up very heavily in that.”

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© 2014 Penton Media Inc.

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