Sprint Unveils Epic 4G - Analyst Blog

Sprint Nextel (S) is expected to roll out its second 4G smartphone “Epic 4G” on August 31, 2010 across all of Sprint’s nationwide retail locations, as well as from its retail partners RadioShack Corp. (RSH), Best Buy Co. Inc. (BBY) and Wal-Mart Stores Inc. (WMT).

The Epic 4G will cost around $249.99 with a two-year service agreement and $100 mail-in rebate. The price of Epic 4G exceeds the cost of the first 4G handset ‘HTC EVO 4G” on account of a bigger display, a slider keyboard and much higher speed.

The expansion of 4G services is vital to Sprint’s survival in the U.S. wireless market, given its continued market share erosion. Sprint continues to provide enhanced services such as faster wireless speed, a 3G/4G smartphone and unlimited data plans to regain its lost market share. The company continues to expand the market coverage of its 4G WiMax network in collaboration with Clearwire Corporation (CLWR). Sprint is way ahead of its prominent rivals AT&T Inc. (T) and Verizon Communications Inc. (VZ), who are yet to launch their 4G network based on the Long-Term Evolution (LTE) standard.

The Epic 4G features the Android operating system, slide-out QWERTY keyboard, a 4-inch touch-screen display, 5-megapixel camera, front-facing camera for video chat, faster upload and download times, LED flash, and 4x digital zoom for photos and HD video1 (720p) video recording.

Sprint is well positioned to leverage the growing wireless smartphone market in the U.S. with a rich portfolio of popular smartphone offerings and more advanced devices in the pipeline. The company’s deployment of 4G WiMax is a major milestone in the wireless market, which may boost the company’s revenues.

However, Sprint’s advantage on account of its 4G wireless service may erode rapidly as a result of the competing services offered by other major companies. Verizon, for instance, plans to launch 4G LTE services in 25 – 30 markets in the fourth quarter of 2010. Additionally, AT&T will conduct LTE trials in 2010 followed by the expected launch in 2011.

Sprint 4G currently covers about 48 markets in 25 states in the U.S. The company expects to launch 4G services in several more markets in 2010, including Boston, Cincinnati, Cleveland, Denver, Los Angeles, Miami, Minneapolis, New York, Pittsburgh, San Francisco and Washington, D.C.

We are currently maintaining our Neutral recommendation for Sprint Nextel with a Zacks #3 Rank ('Hold').

 
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