Sprint halved the price of its Samsung Nexus S 4G Android 2.3 "Gingerbread" smartphone, offering the device for $99 on contract.
Smartphone discounts, even to the tune of 50 percent, are increasingly common among the more than 400 Android handsets crowding the market. Verizon Wireless sometimes sells Android phones via Amazon Wireless for a penny on contract to make room for fresh inventory.
However, Sprint (NYSE:S) and Android maker Google (NASDAQ:GOOG) may have a tactical reason for marking down the gadget: the forthcoming Google Wallet mobile payment service.
Launched May 8 for $199.99 on contract, the Nexus S 4G is powered by a 1GHz processor and features a pretty 4-inch Super AMOLED (Super active-matrix organic LED) display.
But the phone's most significant feature is its inclusion of a NFC (near field communication) chip, which enables communication between the handset and other NFC-capable gadgets or posters.
Paired with Gingerbread, which natively supports NFC, Sprint and Google tout the Nexus S 4G as an enabler of mobile payments, which brings the matter of the discount full circle.
Google is soon set to launch its Google Wallet mobile payment service, which lets consumers tap and pay for goods at participating retailers RadioShack, American Eagle and others. Citigroup and MasterCard are providing the mobile purchase services.
The service, due to launch soon in New York and San Francisco, will initially only be available on the Nexus S 4G, which has a secure NFC chip that will let users safely store their credit card information to pay for goods with their phones.
With the Nexus S 4G as the only phone slated to support Wallet out of the gate, it makes sense that Sprint and Google would want to entice as many consumers to purchase the smartphone. Without the client in the consumer's hand, Wallet will be dead on arrival.
A Sprint spokesperson declined to take the bait on the Wallet speculation, telling eWEEK via email: "Sprint continually reviews its portfolio and pricing to remain competitive in the marketplace."
Perhaps Sprint, like Verizon and others, simply wants to make room on its retail shelves for the Motorola Photon and other 4G Android handsets in its pipeline. Indeed, Sprint's HTC Evo 4G and HTC Evo Shift 4G are also selling for $99 with a data deal.
Of course, the Nexus S 4G could also simply be just selling poorly, necessitating a sharp discount. But the coincidence of marking down the Nexus S 4G so close to the Google Wallet launch is too good to ignore.
Google Wallet needs a fast start out of the gate versus rivals such as eBay's (NASDAQ:EBAY) PayPal unit, which is offering its a phone-to-phone payment service with the T-Mobile 3G Samsung Nexus S smartphones, Visa and others.