While a number of handset manufacturers are imitating the trendsetting iPhone by featuring touch screens of their own, the Instinct is the first to actually look, feel and have a number of features resembling the groundbreaking Apple device.
"This device is like no other touch-screen phone," Mr. Hesse said in a keynote address at the CTIA wireless conference here. The Instinct, he said, provides proof "that the wireless company of the future exists now."
Boasting of improvements
William C. Ogle, chief marketing officer, Samsung Telecommunications America, told Advertising Age the phone is an improvement over the iPhone. After extensive studies, Samsung found there were a number of things consumers didn't like about the iPhone. The Instinct, he said, fixes some of them. For one, the Instinct offers a feedback buzz tone to reassure to the user that the "touch" directive has been received. It also is more intuitive and easily customizable than the iPhone and will be running at a faster speed on the Sprint network, he said.
The Instinct will launch in June with a massive multimedia campaign, one of Sprint's largest ever, said John Garcia, Sprint's acting CMO, but he declined to give specifics. Judging from past spending, that's likely to be in the hundreds of millions of dollars. Sprint spent $1.8 billion in marketing in 2006, according to the latest figures from Advertising Age's DataCenter.
In addition to the Sprint campaign from Omnicom Group's Goodby, Silverstein & Partners, Samsung will launch its own effort from Cheil Communications and Publicis Groupe's Leo Burnett.
The tactic is a return to an ad strategy that has been blamed in part for the failure of the first iTunes phone, a Motorola Rokr. In that effort, two different campaigns were used for launch: one backed by Motorola, and one from Cingular. Creative for each was distinct and unrelated, developed by two separate teams at Omnicom's BBDO, which was the agency for both brands.
For the iPhone launch last year, Apple and its agency, Omnicom's TBWA/Chiat/Day, controlled all the advertising, including AT&T's spend.
Two efforts to accommodate increased spending
Mr. Garcia told Ad Age that the approach of using two different campaigns from different shops was chosen because he expected that, overall, more money would be spent on the Instinct's launch. In addition, Samsung's Mr. Ogle said the campaign for the Instinct will launch a new brand positioning for the Korean manufacturer in the U.S. Sprint, too, sees the launch as the start of a new brand boost for the carrier.
Advertising aside, the Instinct will benefit from Mr. Hesse's traditionally aggressive marketing tactics. Mr. Hesse, CEO of AT&T Wireless from 1997 to 2000, disrupted the telecom industry when he eliminated roaming charges. More recently, for Sprint, he rolled out an all-inclusive unlimited $99 a month "simply everything" wireless plan.
While the Instinct's price is undisclosed, Mr. Garcia said it would be in line with a high-end Sprint phone. Industry sources put that price at about $199. The iPhone, by comparison, retails for $399, down from its $599 introductory price. The Instinct will work with a plan costing $69.99 a month.
Success of the gambit, of course, is far from assured. Marc Lefar, a principal at Marketing Insights, a former CMO of Cingular Wireless, now AT&T Mobility, said Sprint won't be the only wireless carrier to take on the iPhone in coming months. "There are going to an array of phones across the carriers," he said. "And don't assume Apple will stand still either."
Sprint, with 54 million consumers, reported a dismal fourth quarter, losing more than 800,000 customers while rivals AT&T grew to a record 70 million subscribers and Verizon had 66 million.