The week of the entry-level phones
U.S. carriers and their OEM partners have had a busy week with new phone debuts targeting price-sensitive customers. Dish’s Boost Mobile was the first with the launch of the Celero5G, a white-label entry-level 5G phone built by WingTech (which is the ODM behind T-Mobile’s REVVL+ 5G). The most unique part of Boost’s self-branded phone is the service bundle attached to it. The Celero5G carries a $280 price tag and customers paying the full retail price of the phone will receive a year of free service (Unlimited data plan capped at 35GB for 4G/5G speeds).
AT&T’s Cricket Wireless introduced the Icon 3 (built by Foxconn’s FIH Mobile), an entry-level white-label phone priced at only $90. Tracfone, who is getting ready for the Verizon takeover, picked up the Orbic Magic 5G, which sells for $299. Notably, this is Orbic’s second carrier win, which may not count if and when the Verizon takeover finalizes. Finally, Motorola took the stage with the debut of its new “moto g pure” phone. The $149 has an impressive spec list for its price tag, but what’s more impressive is Motorola’s success in winning almost all major carriers’ commitments. The new “moto g pure” will be sold through the postpaid carriers AT&T, T-Mobile, Verizon, US Cellular, and Xfinity Mobile as well as the top prepaid brands such as Boost Mobile, Cricket Wireless, and Metro by T-Mobile.
The NPD Take:
- It’s refreshing to hear that carriers will have access to a sufficient inventory of low-end devices for the upcoming months, which are expected to be quite busy for device upgrades. The sunsetting of the legacy 3G networks and Verizon’s possible intention to move Tracfone users on non-Verizon Certified handsets will force the upgrade of couple million low-end models across most MVNOs, and having enough inventory in this critical short-supply period will be key to retain/attract these upgraders.
- As noted above, Boost Mobile’s launch of the Celero5G is noteworthy due to the carrier’s free year of service promotion. Boost Mobile’s 35GB High-Speed unlimited data plan is regularly priced at $50/month, and combining this plan with the white-label 5G phone is the kind of aggressive promotion we have been expecting to see from Boost Mobile since Dish’s takeover. The MVNO has been consistently losing subscribers since the takeover, and this new promotion may help stop the bleeding in addition to attracting newcomers to the network.
The buzzword of the quarter: Back-Order
The global supply and logistics problems have been taking their toll on the mobile market with many of the mainstream smartphone models becoming out-of-stock soon after debut. NPD Connected Intelligence’s monthly updated Devices Marketplace report revealed that in September 12% of the phones launched in the past 18 months were either Out of Stock or Back-Ordered. Most notably, premium phones such as Apple’s new iPhone 13 series as well as Samsung’s new Galaxy Z Fold 3 and Z Flip 3 series are back-ordered until mid-November or early December depending on the carrier and SKU variant, with T-Mobile experiencing more severe inventory challenges.
The NPD Take:
- Many in the industry have considered Apple to be immune to the global supply challenges, but the company had warned the financial community back in April that its iPhone inventory may also be adversely impacted for the holiday season. It’s noteworthy to mention that Apple’s current inventory problem is likely being driven by high demand for the iPhones due to heavy carrier subsidies.
- T-Mobile’s comparably severe inventory challenges are proof that the carrier’s latest upgrade and switcher promotions geared around the new iPhone 13 models have been hitting their mark more so than rivals’ promotional efforts.