Sprint today started offering the Samsung Epic 4G, and we wonder whether it'll save Clearwire's 4G Mobile WiMAX network.
Clearwire reached a new milestone today as Sprint started offering the Samsung Epic 4G, the second smartphone to support Clearwire's 4G Mobile WiMAX network. When the first smartphone of the kind, the HTC EVO 4G, hit store shelves earlier this year, it became an immediate success for Sprint. The Samsung Epic 4G will likely follow the same path.
That said, when the carrier introduced the HTC EVO 4G, the 4G part was an optional part for those who lived in markets with Clearwire coverage. Those who end up purchasing the Epic 4G today, however, will, according to Sprint's Website, need to sign up for 4G access regardless of where they live. Such a move indicates that a significant part of early adopters of the HTC EVO 4G actually don't have 4G access.
In our opinion, that leaves only one question: Will Samsung, given the Epic 4G's terms, save Clearwire's Mobile WiMAX network? We don't think so. While the Epic 4G is a great smartphone, top-of-the-line smartphones alone are historically not cash cows, the iPhone included.
For every 100,000 new smartphones sold, the percentage of smartphone users that can be considered high-end users (regardless of what type of phone they own) are declining. In 2011, a significant amount of people will be walking around with a high-end smartphone in their pocket, but you can bet they aren't high-end users. So, where does that leave network providers like Clearwire?
Based on yesterday's announcement of Rover, it seems like Clearwire's first attempt will be to offer prepaid plans. By turning to prepaid plans, Clearwire hopes that consumers will sporadically take advantage of 4G access where available, for instance by paying for one-day access. If you buy the Samsung Epic 4G, you'll get 30 days of 4G access for $10. If you buy a Rover 4G data device, you'll get one day of access for $5 (30 days costs $50).
One doesn't have to be a rocket scientist to see that Rover 4G data devices will get Clearwire's network nowhere. So what will it take for 4G access to succeed? Large investments in infrastructure coupled with large investments in R&D by a full range of mobile partners. Based on Clearwire's efforts so far, they may as well have provided 4G access for free, because there's nothing on the table so far that screams "viable" in their efforts to make money, because we all know who's going to own the "data card market" soon.
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