Samsung Electronics Co., the world's second-largest maker of mobile phones, began selling its touch- screen Instinct handset for $70 cheaper than Apple Inc.'s new iPhone to win sales in the U.S.
Sprint Nextel Corp. will offer the phone, which can access e-mail and get live television programs, starting today for $129.99 each, according to Sprint's Web site. That's below larger rival AT&T Inc.'s $199 price for the iPhone. Unlike Apple's latest phone, the Instinct can also record videos.
The Instinct joins High Tech Computer Corp.'s Diamond and LG Electronics Inc.'s Vu in challenging the iPhone, which helped Apple become the second-largest maker of so-called smartphones in the U.S. in less than a year. Still, like other touch-screen models, Samsung's new phone is ``no match'' for Apple's product because it fails to replicate the strength of the iPhone's software, according to technology columnist Walt Mossberg.
``I still feel like the Instinct is inferior to the iPhone, in part because it seems so obviously to be imitating it, but falls short in quite a number of areas,'' said Jan Dawson, an analyst at London-based researcher Ovum. ``There's been so much hype and excitement around the iPhone 3G that almost no matter what Sprint does to publicize this launch it will be very hard to compete with the iPhone buzz.''
Apple will probably ship 4 million iPhones in the U.S. in the second half of this year, or quadruple the number of Instinct phones Samsung is likely to sell, according to estimates by Neil Mawston, an analyst at Strategy Analytics in London. Apple spokeswoman Natalie Kerris declined to comment.
3G IPhone Launch
Apple, based in Cupertino, California, announced the faster and cheaper iPhone this month, which will go on sale in 22 countries on July 11 and run on third-generation, or 3G, wireless networks. AT&T said it would subsidize the device, which will sell for half as much as the previous version.
Unlimited 3G data plans for iPhone consumers will be available for $30 a month, in addition to voice plans starting at $39.99 a month, according to AT&T. The Instinct can be activated with Sprint's plan for unlimited data service starting at $69.99 per month, which will include 450 minutes of voice service.
LG, the world's fourth-largest handset maker, began selling its Vu to AT&T last month, increasing the number of touch-screen phones sold by the Korean company in North America to five. Nokia Oyj, the world's biggest mobile-phone maker, has also promised to introduce touch-screen handsets this year to take on the iPhone.
Samsung, based in Suwon, South Korea, earlier this month unveiled its latest touch-screen model, the Omnia, which may be introduced in the U.S. by the end of the year.
Omnia Negotiations
``We are negotiating with a number of carriers in the U.S. and we are optimistic that we will come to an agreement soon,'' Youngcho Chi, senior vice president of Samsung, said in a Bloomberg Television interview on June 18. The company is talking to all four major U.S. carriers, Chi said.
The Instinct will run on Sprint's EV-DO Revision A network, which provides faster wireless access to browse the Internet and access e-mails.
The phone also comes with so-called ``haptic'' technology that makes the phone vibrate when the screen is touched. Equipped with 2 gigabytes of memory, the phone can store approximately 2,000 songs from the Sprint Music Store, according to Sprint.
Still, the Instinct is less attractive than the iPhone because of the smaller screen and user interface, according to Ovum's Dawson.
``If you're a devoted Sprint customer, or want to avoid AT&T, the Instinct is an OK choice. But it's no iPhone,'' Mossberg wrote in a column on the Wall Street Journal earlier this month.
Fastest-Growing Market
Phones with Internet, e-mail and video are the fastest- growing part of the handset market, with users forecast to quadruple to 400 million units in the next three years, according to RBC Capital Markets estimates.
Samsung boosted its global market share of the mobile-phone market to 16 percent in the first quarter, closing the gap with Nokia, which had a 41 percent, according to researcher Strategy Analytics. Sony Ericsson Mobile Communications Ltd., ranked fifth after LG Electronics, also plans to introduce its touch-screen X1 device under the new Xperia brand.
Motorola Inc., ranked third worldwide, may lose its No. 1 spot in the U.S. this year as consumers abandon its handsets for more-advanced models, research firms IDC and Strategy Analytics said last month.
``The iPhone is something Samsung will watch out for and may have to sell their phones at lower prices to compete,'' said Choi Hyun Jae, an analyst at Tong Yang Investment Bank in Seoul. ``Samsung will probably have to compete with the iPhone to win market share from Motorola, which is losing share in the U.S.''
Sprint, based in Overland Park, Kansas, fell 21 cents to $8.07 at 9:34 a.m. in New York Stock Exchange composite trading. Apple declined $1.48 to $179.42 on the Nasdaq Stock Market.
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