Sprint turns to Android to make up for Pre disappointment

by Caroline Gabriel

With Sprint likely disappointed by its flagship handset launch of 2009, the Palm Pre, the operator is turning to Android to revive its smartphone fortunes, becoming the first CDMA carrier to make a major commitment to the Google platform.

It will soon announce the HTC Hero, which has been launched in Europe by carriers like Orange, but has so far been snubbed by the main US-based Android supporter, T-Mobile, which has instead put the HTC Magic (branded as MyTouch 3G) at the heart of its holiday line up. Many have criticized T-Mobile for this, given the heftier specs and more open user interface of the Hero, so Sprint will be hoping to take advantage of this.

And T-Mobile USA is also holding fire on another new Android device, the Huawei Pulse, which its European sister company is touting as the first Android phone targeted specifically at the booming prepaid market.
Sprint’s support for Android has been long expected as it has worked closely with Google for over a year on various open software initiatives (and the two firms share an investment in WiMAX-based venture Clearwire).

However, CEO Dan Hesse originally took a cautious approach, in contrast to T-Mobile’s early adoption. Late last year, he said the Google OS was not yet “good enough to put the Sprint brand on”, but has clearly changed his mind now as phones start to appear based on the newer release of Android. Verizon Wireless is also expected to take the Android plunge soon, though AT&T is holding back and may take a more Symbian-oriented approach for the mass market.

Sprint insiders said the Hero would be targeted at a more midrange base than high end smartphones like its RIM models. It has made a few design changes to the product, and it will run HTC’s applauded new user interface, Sense, which runs on WinMo and Android. This features seven panels for user personalised widgets, and consumers can have different homescreens for business, home or other profiles. The phone also includes HTC Footprints, which creates digital postcards with audio clips and location, a multitouch display, search, a five megapixel camera and camcorder.

The phone will go on sale on 11 October though pre-registration is open, and it will be priced at $179.99 with a two year commitment, after a $100 mail-in rebate and $50 in other savings (which seems a high price for a phone aimed at the mass end of the smartphone segment).

The Hero will carry the weight of filling a shortfall that is apparently opening up in Sprint’s expectations for Palm Pre. David Eller, investment analyst at TownHall Research, said recently that conversations with the mobile channel indicate that “unit sales of Palm’s Pre are continuing to slow from July levels and will likely come in dramatically below Sprint’s widely believed target for the year of one million to 1.5 million Pre customers. We are reducing our Palm Pre unit estimates for F1Q10 to 416,000 from 488,000. These reduced estimates do not represent a failure on the part of Palm as much as overly ambitious expectations in the face of a weak retail spending environment, competition from the iPhone 3GS, the issue of power recycling, and the slow build-up of a competitive app store competition from the iPhone 3GS which have all contributed to slow adoption. With the Pre’s fade we expect takeover thoughts to fade similarly.”

Meanwhile, T-Mobile International has adopted Huawei’s first Android phone, which it will call the T-Mobile Pulse. The Pulse will come to the UK this month and then to the cellco’s other European markets (Germany, The Netherlands, Czech Republic, Austria, Hungary, Macedonia and Croatia – but no US plans).

The phone features a 3.5-inch touchscreen, HSDPA, Wi-Fi and GPS, and in the UK will cost £179.99 prepaid, though there will be contract options too. This is a hefty price tag for most pay-as-you-go customers, despite the trend for higher end users to go for prepaid in the current downturn. “We’ve seen an increase in the take-up of £80-plus devices on prepay,” said T-Mobile UK, though it did add that the Pulse was designed to be aspiration. It expects the phone to appeal to 18 to 24 year olds, whereas the HTC products were aimed at an older segment and early adopters.

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