If you add up a number of factors, the new LG Glimmer at Alltel Corp. makes a lot of sense for the two companies.
Touchscreens are hot. The Glimmer offers a 2.8-inch touchscreen with slide-out numeric keypad. Multimedia is hot. Glimmer offers a “robust” MP3 player, a 2-megapixel camera with a camcorder that records an hour’s worth of video for your next YouTube triumph. Colors, materials and finishes can be a crucial differentiator. The Glimmer offers a brushed stainless steel feel.
And Alltel, the fifth-largest U.S. carrier by subscriber numbers, has an exclusive on the device for an undisclosed period, giving it a competitive opportunity to lure subscribers from its rivals.
Attracting premium customers
At $250 with a rebate and two-year contract – and given the Glimmer’s feature set – those subscribers are likely to be “technically inclined” consumers who want a touchscreen in a premium package, according to Ehtisham Rabbani, VP of strategy and marketing for LG Electronics Mobilecomm USA Inc., LG’s U.S. division.
“We’ve tried to hit all key segments of the premium market with this combination of features,” Rabbani said.
For LG, the Glimmer adds another SKU at a carrier where the vendor has increased its portfolio presence beyond its competitors. And the device’s price point places it squarely in the path of U.S. subscribers seeking to upgrade their handset. For Alltel, the touchscreen device (its third, after HTC Corp.’s Touch and Palm Inc.’s Treo 755p) expands its portfolio at the high end, where it joins offerings from HTC and Research In Motion Ltd. (The Glimmer’s touchscreen offers haptic-vibration feedback, a notably absent quality on the Apple Inc.’s iPhone.)
The Glimmer and its exclusivity at Alltel help cement the vendor’s long-standing relationship with the carrier, Rabbani said. More handset exclusives will land at the carrier, he added.
Alltel-LG ties grow closer
“We have increased our presence at Alltel,” Rabbani said. “And as its subscriber base has grown, they’ve had to reach a broader cross-section of consumers. This is our first device at Alltel priced above $200 and also our first touchscreen for them. So the Glimmer maintains our leadership position in Alltel’s portfolio.”
In the larger picture, Alltel figures in LG’s no-stone-left-unturned approach to the U.S. market. LG has a presence in three of the four, top-tier carriers and many second-tier carriers. LG expects to grow its average selling price in the U.S. this year, on the strength of upgrade models such as the Glimmer, Rabbani said, while the vendor’s volume growth is expected from markets such as China and Russia. LG has set a global goal for the year of 100 million unit shipments, which would represent 25% growth for the vendor, he said.
Shannon Givens, staff manager of product marketing at Alltel, said that the two companies worked closely to develop a shortcut menu on the Glimmer that delivers the carrier’s Axcess features, including Alltel Navigation, MyCast Weather, Axcess Search and RealTone JukeBox, among others. She said the Glimmer would appeal to customers “looking to express their personal style with their handset,” pointing to the handset’s design and premium look and feel.
Avi Greengart, analyst at Current Analysis, said he had not worked with the Glimmer, but he discussed a number of issues that face vendors delivering touchscreens, as well as the LG-Alltel relationship.
“We’re definitely seeing a bigger emphasis on touchscreens this year,” Greengart said.
The challenge for vendors, he said, is to avoid recreating static menus via the touchscreen, which offers the opportunity to completely revamp one’s user interface.
“LG and Samsung have moved quickly to bring touchscreen devices to market,” Greengart said. “But to really develop a new touchscreen-based user interface takes time. But there’s a lot of value in the Glimmer to Alltel, which can lay claim to having the latest touchscreen product.”
The Glimmer’s strength, he said, is that it presents a more fashionable device than other touchscreen offerings in the U.S. The handset’s design and touchscreen will have to set it apart, according to the analyst, because roughly similar multimedia capabilities are available in other handsets at Alltel at lower price points – including the Muse from rival Samsung Electronics Co. Ltd. (priced at $90) and Motorola Inc.’s Z6m ($80 online, $130 at retail).
“You’re paying a premium because it’s a touchscreen fashion phone,” Greengart said, “and I’m of two minds about that. LG is up on the latest trends – Motorola doesn’t have a fashionable touchscreen offering – so it’s competitive. But you can get most of the Glimmer’s features for less.”
Thus, consumers considering the Glimmer may have to decide how much value they place on the touchscreen feature, the analyst said.
For Alltel, the question will be: will the Glimmer and its features help pull subscribers from other carriers?
Clearly, Alltel intends to find out.
