Samsung Reclaim Is the First Eco Phone Consumers May Actually Want to Buy

| Aug 10, 2009 | Mobile Devices | Competitive Intelligence Report

| Analysts: Avi Greengart, Brad Akyuz

Current Perspective: Very Positive
Vendor Importance: High
Market Impact: High

Event Summary

August 10, 2009 -- Sprint and Samsung launch the Reclaim eco-friendly phone as part of Sprint’s environmental initiatives. The Reclaim is made from 80% recyclable materials and is a full-featured QWERTY messaging phone carrying a $49 price tag. The phone will be available on August 16th at Sprint retail stores as well Best Buy and RadioShack. Sprint will donate $2 from the sale of each Reclaim to the Nature Conservancy’s Adopt an Acre program.

Analytical Summary

• Current Perspective: Very positive on Samsung’s Reclaim at Sprint, because the eco-friendly phone would be competitive even if it was made out of regular plastic and came in a box made of spare Hummer parts. Motorola beat Samsung to the punch with a phone made out of recycled materials, but that phone (the W233 Renew at T-Mobile), has no appeal beyond its environmental message. The Reclaim is a vertical QWERTY slider that looks like several of Samsung’s other QWERTY messaging phones, costs about the same as other QWERTY messaging phones ($49), and features a 2 MP camera, 3G, GPS, and Sprint’s OneClick user interface. Therefore, environmentally-conscious users can buy it without reservation, and the green message serves a positive differentiator for everyone else – if you could buy an LG Lotus or a Samsung Reclaim for the same price, why not get the one that’s better for the planet?

• Vendor Importance: High to Samsung because the Reclaim is good for its brand and the environmental aspects of the product should be a positive differentiator for product sales. Green is still more of a marketing concept in the U.S. rather than the powerful political movement it has become in Europe. Even so, Samsung is wise to grab a hold of this message now before Motorola or Nokia – who also have green products – own it. Samsung is #1 in the highly competitive featurephone market, which aren’t as sexy as smartphones, but still drive the bulk of sales volume.

• Market Impact: High on featurephones because Samsung has proven that an eco-sensitive message and a competitive product design are not mutually exclusive. While the Reclaim is not the least expensive QWERTY messaging phone at Sprint, it is still priced competitively, and it is likely that some of Sprint’s customers will buy it simply for its form factor and functionality.

CLIENTS ONLY

Current Perspective

Competitive Positives and Concerns

Recommended Vendor Actions

| Client access - Full report in Wireless Services - U.S. | More information

Recommended Competitor Actions

• The first handset vendor to adopt recycled/recyclable materials across all of their phones – not just a single model here and there - can steal the green message away from Samsung.

• For now, price, features, and design still matter more to U.S. consumers. Rivals can focus on those aspects to sell more products. For example, LG can point out that its Rumor2 QWERTY messaging phone is $20 cheaper, and while the LG Lotus costs the same today, it is a fashion phone that debuted at triple the price.

• While T-Mobile should point out that it is the first US carrier to launch a “green” phone (the $9 Motorola Renew), it should also realize that consumers will not buy a phone just because it’s “green.” The carrier should work closely with primary supply partner Samsung to add a competitive green product to its portfolio as soon as possible and claim that it is the only U.S. carrier offering multiple “green” products.

• Samsung claims that the Energy Star approved power adapter for the Reclaim actually consumes 12 times less power than the Energy Star standard for standby power consumption. This “green” accessory effort should be a benchmark for the whole industry and handset vendors should work collaboratively, as they do on universal power connectors, on further improving the “green” standards on power adapters.

• Sony Ericsson has several eco-friendly phones such as the C901 selling in the European markets, and the vendor should leverage its expertise in the “green” arena and become the premier eco-friendly phone supplier at its primary U.S. client, AT&T, which currently lacks a “green” phone in its arsenal.

• Sprint also used the launch of the Reclaim to tout its green initiatives. Rivals can retort that these are press-release oriented: a set of environmental design criteria for future devices and accessories, retail space dedicated to highlighting how environmentally friendly the carrier claims to be, and a commitment to reduce paper usage by 30 percent over five years – a cost cutting goal demanded by Sprint’s CFO last year.

Recommended End User / Customer Actions

• Eco-conscious consumers seeking for a new handset meeting current standards such as 3G support, camera and QWERTY keyboard, should look place else than Sprint, and pick up the upcoming Reclaim. While T-Mobile also offers a “green” phone – the Renew – at a much more affordable price ($9), this phone’s capabilities are limited to placing voice calls and sending/receiving SMS.

• Sprint customers looking for a 3G messaging phone should select the Samsung Reclaim over the LG Lotus as both have almost identical feature lists, while the Reclaim is eco-friendly, and offers the chance to literally contribute (thanks to Sprint’s $2 donation for each Reclaim sold) to a “green” charity.

• These are tough economical times and many consumers will prioritize their wallets over the environment. Such consumers without a carrier preference can pick up the similar Samsung Propel at AT&T for $29. Such consumers who are keen on staying with Sprint and seeking for a messaging phone and fine without 3G support, should consider the $19 Sanyo SCP-2700 or $29 LG Rumor2.

CLIENTS ONLY

Current Perspective

Competitive Positives and Concerns

Recommended Vendor Actions

| Client access - Full report in Wireless Services - U.S. | More information

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