By Thomas Gryta and Greg Bensinger
Sprint Nextel Corp. (S) is set to become the second U.S. mobile phone service to offer the Apple Inc. (AAPL) iPhone without a wireless contract.
The Overland Park, Kan., carrier will announce this week it will offer the popular smartphone on its Virgin Mobile pay-as-you-go brand starting as soon as July 1, according to people familiar with the company's plans. Sprint follows Leap Wireless International Inc. (LEAP) in selling the device with prepaid service.
By offering the iPhone, Sprint may help satisfy its commitment to Apple to buy $15.5 billion of the phones over four years, an aggressive bet as more carriers are getting access to the once-exclusive device. Sprint's prepaid service, which also includes the Boost Mobile brand, has been its lone area of growth as contract customers have fled.
Sprint added 489,000 prepaying customers in the first quarter, though it lost 192,000 contract customers, which are considered more profitable. It began offering the iPhone on its Sprint brand in October, and has sold 3.3 million of the device over the past two quarters.
Pricing for the Virgin Mobile iPhone couldn't be learned, and it wasn't clear whether Boost would ultimately carry the device.
An Apple spokeswoman declined to comment. The availability of the prepaid iPhone allows Sprint to sell the device to a new demographic. Aside from having no contract, there are no also credit checks for customers.
The addition of the iPhone to Virgin Mobile also leaves Deutsche Telekom AG's (DTE) T-Mobile USA at a greater disadvantage. It is the last of the largest carriers without the device, which Chief Executive Philipp Humm has said is a major reason it lost 1.7 million contract customers last year.
Notably, the prepaid iPhone from Virgin would be more widely available than Leap's Cricket brand because Cricket is only in smaller markets. Although Cricket users can use their iPhone anywhere, it can only be purchased if they live within its network that covers about 60 million people, or 20% of the U.S. population.
Sprint's network, used by Virgin, claims to cover about 278 million people or almost the entire country.
Leap will begin selling the phone on June 22 and charge $499.99 for a 16-gigabyte iPhone 4S and $399.99 for the older 8-gigabyte iPhone 4. Those prices are about $300 more than those sold by the major carriers, but $150 less than what Apple charges for an unlocked 16-gigabyte iPhone 4S.
Sprint already offers various models of the iPhone at the same prices as the other major carriers when customers sign a two-year contract. That includes an 8-gigabyte iPhone 4 at $99.99 and a 16-gigabyte iPhone 4S for $199.99.
In order to carry the phone, Leap struck a three-year deal with Apple under which it agreed to spend $900 million in volume purchases.
Virgin Mobile USA has prepaid plans that begin at $35 a month and offer unlimited data, although speeds will be throttled after the user consumes 2.5 gigabytes a month. It is unclear if the iPhone will be allowed to work on the current plans.
In comparison, Leap is charging $55 for unlimited talk, text and data, which a similar limit on full-speed data, while plans with other wireless carriers are frequently $100 or more, and users are locked into two-year contracts.
Sprint says its Virgin brand is directed toward "subscribers who are device and data-oriented." Sprint acquired Virgin Mobile USA in 2009 for about $480 million.
Write to Thomas Gryta at thomas.gryta@dowjones.com
(END) Dow Jones Newswires 06-05-121241ET Copyright (c) 2012 Dow Jones & Company, Inc.
Samsung to compete with Microsoft, Nintendo, and Sony via Gaikai cloud gaming - Venturebeat.com
Samsung plans to enter the game business through a cloud-gaming service that is powered by game-streaming startup Gaikai.
The Korean electronics giant plans to announce the service at next week’s Electronic Entertainment Expo (E3). It could be a big change for the game industry, since it offers the tantalizing possibility that Samsung could turn the big three — Sony, Microsoft and Nintendo — into the big four of video game platforms.
“Samsung will become a first party and we will power their game network,” said David Perry, chief executive of Gaikai, in an interview with GamesBeat. “They will be the fourth major company. They are going after gaming.”
But Samsung won’t be introducing a console. It will use the cloud gaming technology to stream games to new models of TVs that are being sold this year. This will allow it to move quickly into the market, since Gaikai is prepared to start a beta test in the coming weeks, Perry said.
With cloud gaming, the game isn’t processed on a user’s computer or TV. It is only displayed there. The processing takes place in a web-connected data center, or cloud. The game graphics and logic are computing on high-powered servers with good graphics technology. Then the visual result is streamed to a user’s PC over a broadband connection. The game can be played in 720p resolution (or for a higher cost at 1080p), which is similar to the experience that many users have with game consoles.
For Samsung, this means it doesn’t have to sell a game console to consumers. Those consumers simply need a universal game controller (USB compatible) and then they play the game on a broadband-connected TV. They can also play it on low-budget computers if they want, as long as they have the broadband connection.
Samsung isn’t relying on Gaikai for the cloud gaming service. In this case, Gaikai supplies the data center infrastructure and streaming technology. Samsung is rounding up the game publishers to provide games, and so far it has 37 of them, Perry said.
“This is Samsung’s gaming service,” he said. “They run it. they will get the games. We are powering it.”
Perry said that the service could begin testing in 30 days. For those who sign up for the closed beta, Gaikai will send them game controllers, as long as they have a compatible device (PC or new Samsung TV). As Samsung needs more capacity in its data centers to support more users, Gaikai will step up and provide that service.
Under the service, users can choose to buy a web-enabled TV with Gaikai’s service pre-installed on it. They can then try out games for free for a half hour and then have an option to buy them. Perry said that Gaikai has been working with Samsung for about nine months.
Perry said the cloud gaming technology will get a boost from Nvidia’s newest Kepler-based graphics chips, which can support four users instead of just one in a cloud-gaming service. The chips have been built in a way that allows them to multitask better, making cloud gaming cheaper. Perry recently showed off the game Hawken being played via Gaikai and Nvidia’s new cloud graphics technology. No doubt Samsung will face a lot of rivals here. OnLive, which launched its cloud gaming service in 2010, will be a head-on competitor.
“Samsung will be big,” Perry said. “The marketing energy and power they have is incredible. We think this will help games go everywhere, opening up games in the living room to a much larger mass market.”
Samsung enters gaming space backed by Gaikai - gamesindustry.biz
Samsung is to enter the video game business, offering a cloud gaming service streaming PC titles to TVs, with beta testing beginning this July.
The technology is provided by David Perry's Gaikai business and will offer games from big publishing companies already onboard with the visionary games delivery service.
The two companies have been working on the deal secretly for some time and were originally going to announce the partnership at E3 2013. But the absence of new home consoles from Sony and Microsoft has left a gap in the market for early adopters looking for high-end gaming experiences delivered easily to the living room.
"As the consoles are reset to a zero audience, it's a wonderful strategic move"
David Perry, Gaikai
"When you talk about Sony, Microsoft and Nintendo the conversation now has to include Samsung. This is their gaming solution," Perry told GamesIndustry International.
"We were supposed to launch at E3 2013 but we've bought it forward and managed to get it working much faster than expected," revealed Perry. "The timing could not be better. As the consoles are reset to a zero audience, it's a wonderful strategic move."
Owners of Samsung's high-range Smart TVs will receive on-screen beta invites this month. Although the service is current for TVs only, Samsung also manufactures a range of smartphones and tablets that could receive the service.
Any PC controller with a USB connection will work with the service, but Samsung will also be mailing out peripherals that it's chosen with the help of Gaikai.
"This is mass market," said Perry. "This isn't about trying to sell to someone who's already bought two consoles, this is trying to open up the market. And they can add any other devices at anytime of they want to."
According to Perry, electronics manufacturers are missing out on the success of the games business.
"You're making tablets, TVs, phones, but nothing participated in the biggest entertainment launch in history - Call of Duty. The movie Avatar works on everything you make, so you're supporting the movie business but it's the games business that's creating these monster hits. You want to get the real state-of-the-art games running on your devices in the best possible quality and the only way you're going to do that is through cloud gaming, there is no other way."
Samsung's smart TV range isn't cheap, but the company wants to target the early adopters who are ready to move on from current generation consoles and are not being catered to by Sony and Microsoft.
"Someone said recently that in 2013 the graphics on tablets are going to be as good as the Xbox 360. My point there is the Xbox 360 is six years old. You're telling me if I wait another 12 months I can be like it was six years ago? That's not what I want to play. I want to play today's hardware running the best new MMO or FPS on maximum settings, as good as the developer's can make it look."
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