It looked like Apple (NASDAQ: AAPL) was going to go out of the business of selling "unlocked" iPhones, which are set up to work on any wireless network. Its new 3G model was going to be sold through about two dozen carriers worldwide. They would be the sole distribution method for the new handset and would make money on the wireless subscription plans marketed with the phones.

It looks like things are not working out that way. According to the AP, "Apple Inc. is putting on sale unlocked iPhone 3G in Hong Kong, allowing people to use it with any mobile phone carrier." The unit will cost consumers $695.

Apple may be taking a significant misstep. If it alienates its carrier partners by undercutting their ability to make money on the product, over time they could push competing products from companies, including the Samsung Instinct and several products that Nokia (NYSE: NOK), the world largest handset company, will introduce later this year.

Apple is a bit vulnerable now. Its 3G iPhone has run into connection problems in the U.S. That may have made some customers less likely to run into stores to get the new devices. Damaging relationships with its distribution operators by offering unlocked iPhones gives the competition an opening.

Douglas A. McIntyre is an editor at 247wallst.com.

After seeing the above advertisement at the website of Sprint Nextel Corp. (NYSE: S), I can see why the Samsung Instinct has become Sprint's hottest-selling phone with 3G capability ever in just over a month on the market. Sprint has sure pulled out all the stops to ensure its would-be customers that this phone is every bit as capable as the vaunted iPhone 3G. In fact, you feel like you are watching a movie by visiting www.sprint.com and seeing the entire Samsung Instinct advertisement -- complete with helicopters and a Batman-esque feel.

But, what's significant about Sprint's online marketing campaign for the Instinct is the integration with Google, Inc.'s (NASDAQ: GOOG) YouTube. Notice the red callout in the above picture. Samsung Instinct owners are being encouraged to shoot a home movie that includes shots of the Instinct handset. If you do that and then notify Sprint, the company will pay you $20.

This is an interesting marketing angle, and it's one I've never seen before. Is this the kind of advertising we'll see from companies in the future? Sprint will be throwing out $20 bills to anyone who creates a viral video on YouTube with their product prominently featured. I suppose that's cheaper than national TV airtime and probably will reach the intended audience for the Instinct handset as effectively as possible (the YouTube generation). I have to give Sprint some credit here -- this is a great marketing idea and plan and will help it compete with the iPhone 3G.

Much has been written about Sprint Nextel Corp.'s (NYSE: S) follies in recent quarters. The third-largest wireless carrier in the U.S. has lost millions of customers to larger and more successful competitors like Verizon Wireless and AT&T, Inc. (NYSE: T). But, with the launch of an extremely successful iPhone competitor (among other things), the company is showing signs of stemming its huge customer defections from past quarters.

The word of support initially came from Verizon Wireless President Denny Strigl , who told investors that Sprint's performance had picked up in the last months -- although Verizon still didn't consider Sprint to be a threat to Verizon Wireless' current results. Still, any improvement for Sprint is a good thing. Sprint CEO Dan Hesse, a wireless industry veteran with a largely successful track record, is the right person to be leading Sprint as well. So, are all the cards lined up for Sprint to become a resurgent force in the U.S. wireless industry?

It's stock has rebounded in a decent way, closing up from mid-March's $6/share to $8.91 recently (it closed yesterday at $8.94/share). Although Sprint lost over a million customers in the first quarter of 2008, the numbers should not be that bad in the second quarter. Sprint also won't be sold any time soon. Verizon Wireless, which just bought Alltel from its private owners, is the only company that could have made a merger work in buying Sprint Nextel. It would be disastrous to have another company come in and try to emulate what Sprint attempted with Nextel back in 2005, which has turned out to be a complete disaster and has led to tens of billions in write-offs (do you hear me now, Deutsche Telekom?).

Sprint has the chops to turn itself around in 2009 with some solid management and good decisions, but it still won't be easy. Spinning off the Nextel network (oops, I mean selling the spectrum off) and migrating all those customers to Sprint's network -- along with heavy retention incentives -- may be Hesse's biggest bet yet. That is, if he has the cahones to do it.

Doug pointed out recently that the new Samsung Instinct most likely could not save Sprint Nextel Corp. (NYSE: S) from its current financial and customer woes. He's right -- one phone does not resurrect a company. However, the Instinct -- which looks and functions very similar to an Apple, Inc. (NASDAQ: AAPL) iPhone -- is still selling like hotcakes. My guess? It's all due to Apple, not Sprint.

The Instinct, which apparently has become Sprint's best-selling 3G phone product ever in a very short time, is an impressive device. Feature-for-feature, it's right there with the upcoming 3G iPhone about to be released in a few weeks. Independent research that counted the movement of Instinct phones at 100 Sprint stores around the country report that it's selling out fast. Sprint contends that the smartphone is the fastest-selling phone in Sprint's history up to this point.

But, to those customers of Sprint (new and old) who just can't see themselves joining AT&T, Inc. (NYSE: T) just to get an iPhone, the Instinct is apparently turning out to be a perfect equivalent. If Apple had never released the original iPhone, the Instinct may have never been born. Apple, as usual, has made other hardware companies realize that hardware needs to be elegant, and software needs to be way elegant. The clumsy designs and complex cellphone interfaces may soon be extinct, thanks to Apple. And, Sprint's sales of the Samsung Instinct will at least owe partial credit to the iPhone maker.

When Sprint Nextel Corp. (NYSE: S) releases its own Apple, Inc. (NASDAQ: AAPL) iPhone competitor this month, all eyes will be on deck to see if this new phone can save the Titanic that is Sprint from sinking. The wireless carrier has been in terrible shape for over a year now, losing millions of customers and just struggling to maintain its customers. Although an Apple iPhone -- by its nature -- invites copycats from all over the globe, this new handset from Sprint looks like the most serious effort yet.

The wrinkle is this: Sprint will require a calling and data plan of at least $69.99 per month to activate and use the new Samsung Instinct phone. There are so many data features that Sprint decided to tack on quite a hefty minimum monthly bill. Hey, AT&T, Inc. (NYSE: T) is doing this with the iPhone, right? This may be the start of a new trend: minimum monthly plans (high minimums) for all these new whiz-bang phones soon to be released. Will customers bite, or will they choose phones with similar capabilities but without the large minimum monthly charge? We'll soon see.

Sprint believes the target customer for the new Samsung Instinct phone may have concerns about being "nickel and dimed" to death on all the charges needed to make the phone work with all its functionality intact. So, the carrier decided to have a flat-rate price and get rid of those concerns. Fair enough -- but don't automatically force the customer to a $70 plan. In Sprint's defense, that larger minimum hasn't swayed iPhone customers from buying gobs of that device with AT&T. But again, this is no iPhone -- it just looks like one. It appears to be packed with many more features than the iPhone, but just as thousands of competitors before it have shown, Apple is Apple -- nobody else is. Can it save Sprint? Hardly.