Carriers prepared for iPhone 2.0

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By Allie Winter
Story posted: June 3, 2008 - 5:59 am EDT

Last year around this time Apple Inc.’s iPhone had yet to be unleashed on the public. AT&T Mobility, which was set to be the exclusive carrier for the device, was cautiously optimistic that the iPhone would be a home run for the carrier, while the competition was silently hoping for a rotten apple.

We all know how that story ended.

Following the iPhone’s strong launch, many of AT&T Mobility’s competitors quickly came to market with so-called “iPhone killers” that included many of the appealing features of the iPhone — the most appealing of which was the touchscreen — but few managed to capture the viral essence of Apple’s device. Verizon Wireless unveiled the LG Electronics Co. Ltd. Voyager, which included both a touchscreen and a real keyboard, Sprint Nextel Corp. tapped HTC Corp. for its Touch, which eschewed the real keyboard for HTC’s TouchFLO interface and Microsoft Corp.’s Windows Mobile operating system, and T-Mobile USA Inc. bolstered its own line of Windows Mobile-powered devices as well as continued to hype its exclusive Sidekick lineup.

With Apple expected to announce a 3G version of the iPhone next week, once again competing operators are lining up their responses.

Competing on instinct

The most aggressive appears to be Sprint Nextel, which most analysts have noted has felt the biggest brunt of iPhone-mania witnessed by an increase in customer defections over the past year. The industry’s No. 3 carrier took the wraps off of its Samsung Instinct at the recent CTIA show in Las Vegas and more recently announced plans to launch the device on June 20.

In an attempt to generate hype for the device, the carrier has been running a series of online videos comparing the Instinct to the current iPhone — with the Instinct coming out on top — and last week unveiled an online trailer for the device complete with explosions.

Iain Gillott, president of iGR Inc. and acknowledged iPhone fan, has so far been unimpressed with Sprint Nextel’s efforts, noting many of the superior features the carrier is touting for its Instinct in comparison to the current iPhone are expected to be addressed by the next-gen version of Apple’s device. Some online pundits also noted that the comparison could backfire for Sprint Nextel as the Instinct clearly has a smaller screen than the iPhone, which has been one of the main selling points of the device.

So does the Samsung Instinct stand a chance? Well, according to Gillott, iPhone fanatics will not stray. Indicated by the long lines for last year’s iPhone, there is a core “cult” as Gillott calls them, of people who are waiting for this device and it is no small group. And for these people, Gillott said, it’s impossible to go buy something else.

“You’re never going to get those people,” Gillott said. “I am one of them and I don’t want a Windows Mobile machine.”

Gillott said however, if other carriers are going to lure anyone in, it will be within the middle mass market. For those who like the idea of the iPhone and are intrigued by the touch screen, yet don’t like the iPhone price or even AT&T Mobility for that matter, Sprint Nextel and Verizon Wireless may have found bait in those people.

The touch screen is probably the most notable and most luring feature of the iPhone and its competitors, but Gillott said that isn’t even the best part. His appreciation of the iPhone lies in its upgradeable capabilities. Similar to updating your PC, the iPhone can implement new applications and functions without purchasing a new handset, common of most phones.