Sprint has begun running ads that promote the Pre as a more affordable smart phone in the long term than an Apple iPhone.
The ads say you can save $1,200 over two years with Sprint compared to what you’d have to pay with AT&T. The ads are going after all the people who bought the original iPhone a couple of years ago and are now reaching the end of their contracts.
In that sense, Sprint is following through on the claims made by Roger McNamee, managing director of Palm investor Elevation Partners, who drew a lot of attention when he said every iPhone owner would ditch AT&T for Sprint and the Palm Pre.
Russ McGuire, Sprint’s vice president of strategy, told us a couple of weeks ago that the hidden costs of the iPhone are related to the cost of voice access, unlimited data, and unlimited text messaging. With AT&T, those costs can mount to $160 a month, while Sprint includes those costs in its subscription price of $100.
It’s sort of like a page out of computer marketing, where companies emphasize “total cost of ownership.” The Pre costs $199 with a two-year contract, which is the same price as an iPhone 3G S, the new version of the iPhone with 16 gigabytes of memory. But over two years, you wind up paying a lot more for the iPhone when you add in service costs.
Sprint’s whole strategy with the Pre is to advertise it as being as capable as the iPhone, yet affordable enough for the rest of us. I have to say it’s smart marketing. McGuire said the idea is to get smart phones into the mass market. The strategy is also exploiting the wrath of people who are in some way sick of AT&T’s service and the feeling of being nickel and dimed to death.
VB’s research team is studying mobile user acquisition: Chime in here, and we’ll share the results.