Sprint-Nextel Corp.(S), the third largest wireless operator in the U.S., has tied up with tech giant Apple Inc. (AAPL) to offer its recently launched iPad Mini and fourth generation iPads.
Sprint is the first wireless operator in the U.S. to launch the new gadget from Apple, which is a smaller version of its very popular tablet series iPad. The new 4G enabled iPad mini customers would enjoy the vast coverage of Sprint LTE networks, which is also undergoing expansion.
Customers could select from Sprint’s two attractive data plans that include a 1GB data plan for $15 or a 100 MB data plan for $10. The best thing about the offer is that it comes with a no contract plan, which allows the customers to activate or terminate the plan at their own discretion. The iPad Mini will be available in black and white option and pricing will start from $459.99 for a 16GB version. Higher capacity option of 32GB and 64GB will cost the customer $559.99 and $659.99, respectively.
Nevertheless, the company declared that only a limited quantity of the new iPads will be available at select Sprint stores, which appears to be a strategic move by the company to check out the customer response.
The new iPad Mini possesses a 7.9 inch multi task display, a 5 megapixel camera and is 23% lighter and 53% thinner than its predecessor iPad 3. Both iPad Mini and the fourth generation iPad comes with the most advanced operating system in the world – iOS 6, which allows it to provide super fast wireless performance.
Apple has announced that sales of iPad Minis have surpassed all expectations and based on that the company has sold 3 million iPads within the first three days of the launch of the new Mini model. We believe the unbelievable success of the iPad Mini coupled with the no-frills low priced data plan of Sprint will help the service provider to attract new tablet customers.
However, the company might face stiff competition from rivals like Verizon Communication Inc. (VZ) and AT&T Inc. (T), when they come up with their own version as these two carriers have more LTE coverage than Sprint.
We maintain our long-term Neutral recommendation on Sprint-Nextel Corp. The company also retains a Zacks #3 Rank, implying a short-term Hold rating.
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