Wireless providers, handset manufacturers position for holiday rush

With the country still reeling from a recession and wireless growth slowing, industry players are becoming especially creative this holiday season in trying to attract consumers. We have already seen nearly every operator adjust their rate plans to take advantage of the growing appeal of no-contract offerings as well as the launch or announced launch of a bevy of new devices and smartphones looking to catch the eye of shoppers.
While carriers often throw around rebate offerings on handsets depending on sales and inventory, these moves along with the continued strong customer growth by Verizon Wireless and AT&T Mobility, despite rate plans up to twice as expensive as those being offered by rivals, point to a wireless market being driven by device selection and perception and not price.
But, beyond the regular tweaking, this week brought a couple of new attempts to draw consumers once the flag drops on the official holiday shopping season this Friday, also known as Black Friday.
T-Mobile USA Inc., which has already dramatically revised its rate plans, announced yesterday that its Black Friday promotions will include an additional $50 off of select smartphones, including Motorola Inc.’s Cliq, Research In Motion Ltd.’s BlackBerry Bold 9700 and Samsung Electronics Co. Ltd. Highlight. The discount knocks the price for each device down to $150 after all rebates.
Price cuts on devices is really nothing new, but with T-Mobile USA’s poor Q3 results still fresh, the carrier looks to be pulling out all stops in an attempt to remain relevant next to its larger, nationwide rivals. The carrier has already completely renovated its rate plans, ditching its catchy MyFaves plans for its new Even More offerings that provide unlimited calling for as low as $50 per month without a contract.
The carrier has aggressively targeted its advertisements as the price difference between its new offerings and those of Verizon Wireless and AT&T Mobility in an attempt to lure customers looking to save a few bucks. But, as has been the case with Sprint Nextel Corp.’s similar tactics, consumers seem more focused on device and network concerns, both of which favor the Big 2 in the minds of wireless customers. (That battle between Verizon Wireless and AT&T Mobility is being aggressively fought through their respective television commercials and in the court room.)
Cash for clunkers
Handset manufacturer HTC Corp. is also getting in on the rebate action, announcing a trade-in plan that can net consumers an additional $100 off of the price of select HTC devices. The company said that starting Nov. 27, consumers can trade in select devices for the rebate on its Tilt 2, Touch Pro2, Imagio or Ozone devices from AT&T Mobility, Verizon Wireless or T-Mobile USA. The offer is set to run through Dec. 31.
(Missing from the HTC promotion are new devices purchased from Sprint Nextel or other regional carriers. HTC was quick to respond that indeed only the three carriers mentioned would be involved with the rebate offering, but did not respond to questions about why others are not participating.)
Qualified trade-ins include any BlackBerry, Apple Inc. iPhone, Palm Inc. device or Nokia smartphone, as well as any device running either Microsoft Corp.’s Windows Mobile OS or Google Inc.’s Android OS. These devices can be associated with any carrier.
The HTC offer is in addition to a recent advertising blitz by the handset manufacturer based around its new “Quietly Brilliant” branding campaign and “You” tagline launched in late October.
Behind the numbers
While no one will admit that these additional incentives are linked to any concerns about slow sales of any of the devices mentioned or growth at the carriers involved, it’s easy to put the pieces together.
T-Mobile USA is in a dog fight to try to remain relevant in discussions of nationwide operators, a similar place Sprint Nextel has seen itself in over the past couple of years. However, unlike Sprint Nextel, T-Mobile USA has a deep-pocketed sugar-daddy in Deutsche Telekom AG that has continued to express its desire to remain a player in the U.S. market and has invested billions of dollars in new spectrum and a 3G buildout to support those claims. DT has also made statements that it might be interested in creative ways to bring 4G services to the carrier’s network through potential partnerships or acquisitions that have jostled the stock price of a number of domestic operators. So, for T-Mobile USA, failure does not seem to be an option.
For HTC, the straight-to-consumer rebate offering highlights an increasingly competitive smartphone market in which the company exclusively plays. Whether it be Apple’s all-powerful iPhone hogging the limelight at AT&T Mobility, Motorola’s Droid getting all the love at Verizon Wireless or a slew of new smartphones from Samsung, LG, Motorola, Palm, RIM and Nokia being rolled out on a daily basis at every other carrier, HTC cannot afford to lose its place in the battle. The branding campaign was the first step in that direction as it attempts to place the company’s rather odd name brand in the forefront of consumers’ minds. The rebate offering looks to continue any of that momentum.
Will either of these plans prove fruitful? Well, that of course is to be seen. But, these moves show that while the holiday selling season is still an important period for the wireless industry, it’s shaping up to be of increased importance for some of the players.