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Sprint's Instinct Looking Good

Speculation heated up Wednesday after a JPMorgan Chase analyst released a research note quoting a Verizon executive on Sprint's recent success. Analyst Mike McCormack wrote that during a sit-down interview, Verizon President and COO Denny Strigl said that Verizon is "fortunate Sprint has stumbled, though Sprint [has been] doing better in last 30 days."

Strigl added that it was more important for Verizon to look at revenue growth than customer growth, which many took as a slight nod that the number of subscribers swapping over was indeed shrinking.

"To state the obvious, churn rates are only half the equation," warns Sanford Bernstein analyst Craig Moffett. "Keeping the customers you have is a pretty good start. There's also the related problem of getting new customers in the door. Anecdotally, gross additions have relatively been weak."

Moffett says that part of Sprint's rumored turnaround can be partly attributed to Samsung's new Instinct smartphone. Earlier this week, Sprint announced that the Instinct had become the fastest-selling EVDO handset in the company's history and that record sales have led to temporary shortages of the Instinct at some locations across the U.S.

The touch-screen device is priced at $129.99 (after a mail-in rebate) in order to better compete with Apple's (AAPL - Get Report) iPhone 3G, which is priced at $199 for an 8-gigabyte version that goes on sale July 11.

Moffett says that offering newer, more-attractive handsets such as the Instinct "is a huge step" but that one has to question the significance of Instinct's so-called "record-breaking" sales. Doubt over the announcement came after a Sprint spokesperson declined to release specific sales numbers and would not divulge which device previously held the sales record.
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