Sprint (NYSE: S) is making good on its promise to support Microsoft's (NASDAQ: MSFT) Windows Phone platform, and today announced it will sell the mid-range Lumia 635.
Sprint's Lumia 635
The Lumia 635, which was launched earlier this year by AT&T Mobility (NYSE: T) and T-Mobile US (NYSE:TMUS), marks the first time Sprint has worked with Nokia since March 2005 (Nokia's devices business was absorbed by Microsoft in April and renamed Microsoft Devices). The launch also represents the first time Sprint has released a Windows Phone 8.1 device. Sprint is still selling the aging HTC 8XT and Samsung ATIV S Neo at a limited number of retail stores, but the phones are no longer listed on Sprint's website.
The Lumia 635 will first launch on Sprint's prepaid brands Boost Mobile and Virgin Mobile on Dec. 23, and then will be launched for Sprint's postpaid service on Jan. 16. On Boost and Virgin Mobile the Lumia 635 will cost $100, excludes taxes, which is cheaper than the phone sells for at full price at AT&T ($140) and T-Mobile ($130).
For Microsoft, the deal with Sprint represents the next stage of Nokia's comeback in the U.S. market, which has included high-end device launches with AT&T, T-Mobile and Verizon Wireless (NYSE: VZ), as well as subsequent launches of more entry-level and mid-range phones.
Nokia, when it re-entered the U.S. market with Windows Phone and the Lumia brand, made a conscious effort to be more carrier-focused. Matt Rothschild, the head of North America sales for Microsoft Mobile Devices, said the partnership with Sprint represents "another great achievement" in that strategy.
Rothschild said that there was no specific reason why Sprint was the last Tier 1 U.S. carrier to launch Lumia phones. He noted that Microsoft and Sprint worked closely together to identify the most appropriate kind of phone to launch together given Sprint's existing device portfolio. "We wanted to make sure we had all of these pieces right and lined up," he said.
The Lumia 635 is designed to appeal to budget-conscious consumers, and Microsoft is seeing a lot of traction in that part of the market. Getting more consumers to buy entry-level and mid-range devices will be crucial to expanding Windows Phone's market share, which has been languishing in the low single digits.
Microsoft is "seeing a lot of success with the 635 with the value-orientated customer," according to Rothschild, who said that the 635 launch "was a considered decision between all of the organizations." The Lumia 635 is also Spark-capable and will work on Sprint's tri-band LTE network, including its 2.5 GHz spectrum, which is one of the factors that slowed down a launch with Sprint, since Microsoft wanted to ensure the experience on Sprint's network was optimal.
Microsoft worked closely with Sprint's marketing and retail teams to ensure that retail sales representatives are educated on the Lumia 635's capabilities and the Windows Phone platform in general.
Rothschild said Microsoft will continue to work with Sprint and that the launch "only represents the first step in what I expect to be a great partnership." He declined to provide details but said he expects the Lumia 635 to be a success at Sprint and the first part of a broader portfolio of devices next year.
In terms of Microsoft's overall strategy for the U.S. market, Rothschild said securing Sprint as a partner is critical. "We want Lumia devices here in the U.S. to be available to as many consumers as possible," he said. "We want all consumers to really have that choice."
Rothschild added that the Sprint launch "does represent the continuing expansion of our partnerships with operators." He said the company may expand to additional carriers in the future.
"We want to build a sustainable, deep partnership with the operators," he said. "When we feel we are in that place, we will look to see what else is a possibility."
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