Sprint Nextel Corp. became the first U.S. operator to offer full-track music downloads, launching a dual-delivery service last week using phones from Samsung Electronics Co. Ltd. and Sanyo Electric Co.
The carrier introduced a mobile music store that allows users to purchase and download full-length tunes to their phone or PC. The service is one of several new entertainment and communications offerings Sprint Nextel rolled out on its CDMA2000 1x EV-DO network, which it is marketing as the Power Vision Network and separate from its 1x-based Vision network. Sprint Nextel noted the Power Vision service is expected to cover 130 million potential customers by the middle of next month and more than 150 million pops by early next year.
Sprint Nextel also announced an on demand offering that delivers custom information such as news, sports and weather, based on users’ ZIP codes, and information services including directory search, maps and driving directions.
While other U.S. operators offer music-focused phones that can store and play music transferred from PCs, Sprint Nextel is the first to deliver downloads directly to handsets.
Groove Mobile, a Massachusetts-based mobile music company, is powering the service. RCR Wireless News in August reported a deal between Sprint Nextel and Groove for music downloads. Groove also provides full-length download services for wireless carriers in Asia and Europe.
Sprint said it will charge $2.50 per download to subscribers of its Power Vision service, which starts at $15 a month. Songs will be formatted specifically for the phone or PC.
Carriers around the world have rushed to deploy full-length download services this year, but have yet to determine acceptable pricing structures for pay-per-song models. Orange, a European operator, offers full songs at about $1.83 per download; other a la carte services charge between $1.50 and $3 per tune.
Prices for content such as ringtones have been well established, but analysts say digital music lovers who have become accustomed to spending less than a dollar a song via Web-based services like iTunes or Rhapsody may not be interested in paying a premium to have tunes delivered directly to their phones. While Sprint Nextel will gain an undeniable edge against its competitors in being the first to bring full-track downloads to market, the service is unlikely to gain much traction unless prices are slashed, several industry insiders said.
“(SprintNextel’s price) of $2.50 is a very steep price to pay when the norm for PC-based music downloads is 99 cents,” Current Analysis analysts Suzanna Ellyn and Wes Henderek wrote in an intelligence report. “On top of the $2.50 per music download, customers need a $230 to $250 phone (after savings), and (must) subscribe to a Power Vision plan starting at $15. This is all a costly concept for the mainstream consumer to absorb.”
A recent study from The NPD Group found 52 percent of mobile users would prefer to load tunes onto their handsets via a cable between the phone and PC, while only 37 percent said they were interested in downloading songs over the mobile network. Meanwhile, the survey found the optimum price for a mobile song download is $1.75, indicating “the new Sprint service will hold limited appeal for price-sensitive consumers.”
Sprint downplayed the controversy, arguing $2.50 per song is a fair price for a dual-delivery service that exploits the convenience and ease of over-the-air downloads with the sophistication only PCs can offer. And while the carrier suffered some backlash over the cost of its music service, its competitive Power Vision packages were seen as a shot across the bow of Verizon Wireless’ Vcast offering.
The operator is offering three tiers of all-you-can eat high-speed mobile data services. A basic high-speed version of its Power Vision data service costs $15 a month, including unlimited e-mail, instant messaging, its “basic cable” mobile TV package, and streaming channels for ABC News video and Sirius Music audio. Twenty dollars a month adds additional video channels and unlimited picture messaging, and $25 buys a dozen more video channels including ESPN, Fox News Channel, and The Weather Channel.
Further, Sprint introduced plans allowing subscribers to use their handset and either a USB cable connection or wireless Bluetooth connection in lieu of a data card for laptop access to the network. The $25 option gives users a 40-megabyte data limit through a computer with a penny-per-kilobyte overage capped at $70 per month.
Verizon Wireless by contrast, offers an all-you-can-eat wireless broadband plan for $60 a month to its voice subscribers, but users must buy a PC card.
“The most interesting aspect of the Power Vision rollout is the ability to use EV-DO handsets as a phone modem,” according to Current Analysis’s William Ho. “While this may not appeal to a wide group of mobile business professionals, it will invariably appeal to the technically savvy `prosumer.”‘
The supporting handsets from Samsung and Sanyo are also the first consumer-oriented EV-DO handsets launched by Sprint. The carrier offers a pair of EV-DO PC cards and earlier this year launched an EV-DO smart phone.
The Samsung MM-A940 handset includes a 2-megapixel digital camera with 2x optical zoom, Bluetooth, and support for the carrier’s streaming content. The handset sells for $250 with rebates and a two-year service contract.
The Sanyo MM-9000 includes a 1.3-megapixel digital camera and sells for $230 with a two-year contract.
