Verizon eyes prepaid
Verizon, the nation’s largest wireless operator, last week announced that it has struck an acquisition deal with Tracfone, the leading prepaid MVNO, which has 21 million prepaid subscribers. Verizon has committed to paying Tracfone $6.25 billion (half of it in company stock) and the deal is expected to close after the first half of 2021. Verizon announced that 13 million of Tracfone’s 21 million subscribers already run on the Verizon network as part of Tracfone’s wholesale deal with the carrier.
The NPD Take:
- Verizon has long been struggling to gain momentum in the prepaid market despite its wide distribution network that includes most of the prominent nationwide retail channels. The carrier’s digital-only prepaid initiatives such as Visible and Yahoo Mobile have generated awareness and interest, but neither has moved the needle for Verizon. This acquisition will put Verizon at the top of the prepaid ranks, and the carrier has the opportunity to drive the Tracfone ARPU (which has been about 25% lower than rivals like Metro and Cricket) to higher levels.
- Tracfone’s flagship brand StraightTalk is sold exclusively through Walmart, which has become one of the most important distribution channels for mobile phones amid pandemic. Verizon already sells postpaid and prepaid phones through Walmart, but this acquisition gives the carrier an even higher status considering StraightTalk’s scale for Walmart’s mobile phone business. The strengthened partnership can serve Verizon a great opportunity in its rural broadband fixed wireless initiatives considering the position of Walmart in rural distribution. You can read our in-depth analysis of the acquisition in our recently published blog.
Another LG flagship, another bold statement
LG last week announced the upcoming availability of its latest flagship smartphone, the Wing. The new phone boasts a unique design that has a main 6.8-inch display that swivels clockwise to reveal a 3.9-inch secondary screen that doubles as a control pad (for imaging and gaming applications). Users can also run multiple applications (i.e. watching content on the main display while using messaging apps on the secondary display). The phone runs on Qualcomm’s battery-friendly Snapdragon 765G chipset and houses a three-lens camera (a 64-MP main lens) in the back and a pop-up camera for selfie captures. The IP54-rated phone will initially debut through Verizon followed by AT&T and T-Mobile later on. LG did not provide any details on price point, but this could very well become LG’s first phone going over the $1000 MSRP bar in the U.S.
The NPD Take:
- LG has long been struggling with its flagship series (the V and the previous G series phones) that have not been able to “connect” with consumers. The OEM’s design innovations such as curved form factor (the G4), modular built (the G5), the boombox screen (the G7), or the gesture controls (the G8) have been great marketing statements but they were simply marginal features at best. This disconnect has cost LG dearly as it lost significant market share to existing and upcoming rivals. For that very reason, LG has decided to fork its device business two separate lines; the Universal Line, which focuses on mainstream designs such as the Velvet, and the Explorer Project, which goes after the niche market. The Wing is LG’s first “Explorer” attempt, and while it may seem to be another one of the bold statements LG had made with the old G series, the expectations are more realistic this time.
Verizon PC/tablet add-on plans go Unlimited
Verizon announced an overhaul of its connected device plans for consumers. The carrier’s previous 5GB ($40) and 10GB ($50/month) tablet and PC data plans are now replaced with two unlimited options, the $20/month Unlimited plan which is deprioritized after 15GB, and a $30/month Unlimited Plus plan that has a 30GB data de-prioritization limit (meaning users’ data access speeds are throttled during network congestion periods). Notably, Verizon has been offering the same Unlimited Plus plan to data-only customers for $90/month. Verizon also announced that its data connect fees for smartwatches is now reduced from $20/month to $10/month. Customers on Verizon’s top tier plan (the Get More Unlimited) enjoy a 50% discount on all data connect plans.
The NPD Take:
- Verizon’s new plans are priced aggressively considering rival AT&T’s (the runner-up carrier for tablet connections behind Verizon) offers its Data Connect plan with 35GB data at $50/month. The aggressive prices coupled with the increase in demand for connectivity during the pandemic should help Verizon grow its connected device base, which has been contracting in parallel to the connected tablet churn observed in the past two years.
- The drop in smartwatch connection fees is important considering the expected increase in demand for LTE-powered Apple Watches due to the new Family Setup plan that doubles Apple Watches as kid tracker devices without the need of having a separate iPhone connection.