T-Mobile sprinkles stardust on Sidekick II

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T-Mobile USA goes for street cred in the critical holiday-selling season with a quirky celebrity-studded effort for its anti-Blackberry Internet communication device, the Sidekick II.

The strategy isn't just to sell 100,000 Sidekick II devices but also to give the entire T-Mobile brand some Hollywood cachet, according to Jim Goodwin, VP-integrated marketing of the Deutsche Telekom subsidiary. "We want to reinforce the brand image as a hip and cool technology provider," said Mr. Goodwin.

T- Mobile has been seeding its Sidekick through Hollywood, starting with a star-studded party in August highlighted by a Black Eyed Peas performance at the opening of ESPN's X Games.Though dabbling with a new group of celebs, Mr. Goodwin said T-Mobile will continue with its longtime spokeswoman, Catherine Zeta-Jones.

slimmed down

The Sidekick II, with a swivel screen that opens to a full keyboard, is targeted to 12-to 24-year olds, 75% of whom use instant messaging as a form of communication every day. T-Mobile launched the first Sidekick in 2002. The new version, from Danger Inc., through a manufacturing contract with Sharp, is 25% slimmer than the original, has an integrated camera and flash, speakerphone and a 4.5-hour talk life.

In the third quarter, T-Mobile, one of the big winners from last year's federal number portability mandate that allowed cellphone customers to take their number to a new service provider, picked up 901,000 subscribers. That's fewer than Verizon Wireless' 1.7 million net new subscribers, but more than Cingular's 657,000. Sprint saw a net gain of 952,000 subscribers, but more than half came through its wholesale and affiliate partners, such as Virgin Mobile, which offers service over Sprint lines.

TV ads, from Publicis Groupe's Publicis in the West, feature celebrities in the act of very unglamorous activities, such as trying to figure out how to add fabric softener to a washing machine. In one spot, rapper Snoop Dogg messages a series of celebrities, from Paris Hilton to Wayne Newton, asking for laundry advice. Spots use the line, "Everybody needs a Sidekick."

In case customers still aren't convinced, T-Mobile is sweetening the offer with unlimited data services such as e-mail, IM and Web browsing for a flat rate of $19.95 a month. It's peppering its ads with a limited offer of free calling on Friday as well as Saturday and Sunday. The Sidekick sells from almost $500 to as low as $150 with a service contract.

lower rate of churn

T-Mobile is the nation's fourth-largest cellphone carrier, with 16.1 million subscribers, just behind Sprint with 17.3 million, and No. 2 Verizon Wireless with 42.1 million and the new No. 1, Cingular, with 47.6 million subscribers, according to i2 Partners, a New York technology-consulting firm. Its churn rate, or the rate at which subscribers are dropping the service, is among the highest among the top carriers, 3.1%, compared with 3% for Cingular, 2.7% for Sprint, and 1.7% for Verizon Wireless.

But Richard Doherty, research director, Envisioneering Group, said that the Sidekick, "a cool device youth can use instead of being tied to a Blackberry brick in the pocket," results in a lower churn rate for T-Mobile. He noted that owners of Sidekick-like devices are 30% less likely to switch wireless providers than traditional cellphone owners.

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