Sprint (S) To Exclusively Launch Smart Phone By Essential

Sprint Corp. (NYSE:S) , the fourth largest U.S telecom operator has cracked the deal to sell the first phone from Essential. The wireless network operator will be the exclusive network carrier for the new phone Essential PH-1. Essential PH-1 will be available inSprint’s retail stores, its online and telemarketing channels, and Best Buy Co. Inc. (NYSE:BBY) .

The Essential PH-1, is a high-end smart phone that runs on Android software developed by Alphabet Inc.’s (NASDAQ:GOOGL) Google. The handset features a Qualcomm Inc. (NASDAQ:QCOM) developed Snapdragon 835 processor, a 128 GB internal storage and a 360-degree camera. Essential PH-1 is priced at $700.

Competition in the U.S. is intense as the spaceboasts a high rate (95%) of wireless penetration. This, in turn, may pressurize the top and bottom lines of carriers vying for market share.Sprint has been continually making efforts to lure customers from rival carriers by offering attractive promotional plans and lucrative discounts in turn has led to a high cash burn rate and heavy losses for the company. Notably, with the recent increase in smart phone launches, specifically the iPhone 7, we expect aggressive promotional offers by Sprint which may impede margins in the coming quarters.

At this juncture, an exclusive selling right for a newly launched smart phone may help the company to regain some market share in the high-end mobile phone market. It’s upcoming 5G network launch will also bode well for the new smartphone.

Price Performance of Sprint

Over the last three months, Sprint has lost 1.91% compared with the Zacks categorized U.S. Wireless National industry's loss of 4.62%.

Despite several adverse conditions, Sprint is on track with its network modernization and integration efforts, which should fortify its position in the wireless industry. The company’s core platform business is dependent on the success of its multi-billion dollar restructuring program – Network Vision. We believe that these are the primary reasons for Sprint currently carrying a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here

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