Verizon to unveil Droid Eris phone for $99 -- and kills Sprint Nextel's $180 price for the HTC Hero


While Sprint Nextel Corp. (NYSE: S) continues losing hundreds of thousands of customers every quarter, it has actually raised the bar on offering cutting-edge smartphones at the same time. Smartphones, which are slowly but surely replacing the standard cellphone for the typical "always need to be connected" consumer, are helping wireless carriers drum up wireless data revenue to replace the lost voice revenue as customers talk less.


At the start of October, Sprint Nextel unveiled its first Google, Inc. (NASDAQ: GOOG) Android-powered smartphone, the HTC Hero, at the $180 price point after rebate. Sprint had waited almost two years to release its first Android handset, and the Hero was (and continues to be) advertised like crazy. Retail partner Best Buy, Inc. (NYSE: BBY) even gave its "Reward Zone" members early access to the handset.

Larger competitor Verizon Wireless, which is currently slamming Apple, Inc. (NASDAQ: AAPL) and AT&T, Inc. (NYSE: T) over the limited capabilities of the iPhone and the spotty 3G coverage AT&T provides, is in the midst of releasing it's first-ever Android phone tomorrow, which it's calling the "Droid", for $199. Next week, Verizon Wireless will release the "Droid Eris" for $99 -- which is basically the exact same handset as Sprint's HTC Hero. Notice the price difference there -- Verizon's version will cut almost half the price off compared to the Sprint version.

What can Sprint do? It has to lower the price of its HTC Hero unit to match. Even though Sprint is well-known now for the cheapest voice and data plans of the "big four" wireless carriers, customers tend to fixate on equipment prices more than an overall long-term cost comparison. So, with Sprint continuing to lose customers to Verizon Wireless and AT&T, will it become more competitive with its same-equipment on-contract? It sure needs to. Otherwise, what is left to help try and attract customers from the competition? Not much.

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