New realism in cell phone business models?

Sprint has a cute new convergence phone, the Samsung SPH-m620, which does a better job than most of trying to combine both telephone and MP3 player. Endgadget has a nice album of photos.

That Samsung (#3 or #4 in the world) and Sprint (#3 in the US) are trying to gain traction using an innovative phone is not all that surprising. I was also not surprised by Samsung’s attempt to adopt a more Apple-like product naming strategy with the new “UpStage,” or the complaint by at least one reviewer that they still don’t get software.

But what I found most interesting is that with the phone, Sprint promises over-the-air 99¢ music downloads, in direct competition with the e-commerce site formerly-known-as-iTunes-Music-Store. Sure, if you switch phones or want to play the songs on your home stereo, you’ll wish you had iTunes (or Zune or Rhapsody or Wal-Mart) PC-based downloads. But it’s still much more reasonable than the $1.99 per song of the Verizon V Cast; as an added benefit, it comes without the obnoxious ads. (Yes I know some services allow you to download a song to your PC and a separate copy to your mobile phone, while others allow you to sideload songs from your PC to your phone).

It would be good to see some price competition in music downloading services, if for no other reason than to convince the music industry to give up its long-held fantasy that it can raise digital download prices as an effective strategy for competing with free pirated MP3 files.

Technorati Tags: business models, MP3, music industry, Sprint, Samsung, smartphones