HTC EVO Pays Sprint's First 4G Smartphone Dividend

Sprint said today that the HTC EVO 4G phone outsold prior bestsellers, the Palm Pre and Samsung Instinct, by a factor of three on its first day of availability. Sprint doesn’t provided actual sales figures, saying only that more EVO handsets were sold in one day than the Pre — the sales of which were estimated at around 50,000 units its first weekend — and the Instinct in their first three days of availability combined. The EVO sales numbers are driven by the phone’s fast 4G connection, 4.3-inch display and Google’s Android platform.

Although initial testing of the EVO’s 4G connection — around 4 Mbps down and 1 Mbps up — shows speeds only two to three times faster than standard 3G phones, smartphone customers crave any amount of faster connectivity. With a speedy wireless pipe, media streaming on the EVO’s large display provides a more seamless experience with less buffering. And 4G paired with the front-facing, secondary camera of the EVO enables video chatting — not a mainstream feature today, but one that’s expected to generate 30 billion video calls by 2015, according to our latest GigaOM Pro report on the subject (subscription required).

The initial success of the large-screened Android device shows that potential customers weren’t scared off by the $10 monthly “premium data fee” required with the EVO. Although Sprint claims this additional charge isn’t due to the handset’s 4G compatibility, access to the faster WiMAX network is the only major data difference as compared to other smartphones. Customers that don’t have 4G coverage are still required to pay this fee, which could have put a damper on initial demand for the EVO as it’s generated a fair amount of criticism.

Sales records for the EVO come at a perfect time for Sprint, which lost 504,000 post-paid customers in the most recently reported quarter and currently has a higher churn rate than both AT&T and Verizon. The question now is, how many EVO customers traded up from a Palm Pre or other Sprint smartphone vs. those that came from a different carrier? Given the sheer number of comparable superphones on other carriers — those with a 1 GHz Qualcomm Snapdragon CPU and high-resolution touchscreen, for example — and the limited availability of 4G coverage, I suspect that the majority of EVO owners were already with Sprint. Regardless, with its majority stake in Clearwire, Sprint is betting big on a national 4G network and the EVO is the first smartphone dividend paid on this investment.

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