OEMs exploit the CES hype for new phone debuts
CES week was a memorable one for the mobile phone industry with several device makers taking advantage of the hype to debut their latest models at or off the show. Samsung was the first to take the stage with the debut of the Galaxy S21 Fan Edition (FE), the budget-friendly version of its Galaxy S flagship series. The “budget flagship” S21 FE boasts Qualcomm’s Snapdragon 888 chipset, which also powers the actual Galaxy S21 flagship, and carries a $699 tag, which is only $100 below that of the Galaxy S21. OnePlus, which is gradually growing its fan base in the U.S., pulled out of CES 2022, but that did not stop it releasing its much-awaited OnePlus 10 Pro flagship smartphone, which will run on Qualcomm’s new released Snapdragon 8 Gen 1 chipset. The phone will initially debut in China this month, before making its way to the U.S. in spring. TCL, which captured the CES spotlights with its 98-inch Roku TV, also launched a couple of mobile products including the new TCL 30 series, which will be carried by T-Mobile and Verizon. TCL also introduced TCL Book 14 GO, its first attempt at the PC market running on a Qualcomm-based ARM chip. Finally, Nokia introduced five new low-cost models (including the $239 5G-powered G400), which will be sold through various prepaid carriers.
The NPD Take:
- If the performance of the first Fan Edition version, the S20 FE, is any indication (according to NPD’s Mobile Phone POS service it was the top seller in the national retail channels during the holiday season), Samsung’s improved S21 FE phone is poised to be a major success if supply does not become an issue.
- Samsung’s new S21 flagship debuted at a lower price in February 2021. However, the OEM did not change the price on the S21 FE variant, hence the mere $100 price delta between the flagship and the budget version. While the upgraded specs on the new S21 FE justify the price staying constant (in relation to the flagship S21 price drop), at $699, the S21 FE is $100 more than Google’s new Pixel 6 phone, which has shown an impressive sales performance since its debut in October.
- OnePlus’ decision to debut the new 10 Pro flagship in China rather than the US, its primary launchpad, should be a direct result of the management changes, which put the brand’s operations under Oppo.
- We are more excited about Nokia’s low-cost 4G lineup than its $239 5G phone because carriers have been struggling to find 4G models to offer to customers who are being forced to upgrade due to operators’ 3G network shutdowns. Component manufacturers have long been prioritizing the high-margin 5G chips over 4G LTE models, thus causing substantial supply problems.
Verizon goes fully unlimited
Verizon last week announced a major makeover of its new rate plans, in line with its upcoming C-band 5G network launch. While pricing and overall plan schemes did not change, the carrier’s top-end “Get More" plan is now offered with true unlimited cellular data, meaning the plan subscribers will not be throttled or deprioritized when they hit the 50 GB mark as in the past. Another noticeable upgrade is the expansion of the mobile hotspot data allowance from 30 GB per month to an industry-leading 50 GB per month. Notably, Verizon also increased the mobile hot spot bucket size of the entry and mid-tier plans from 15 GB to 25 GB per month, but both plans continue to have the 50 GB high-speed data limit.
The NPD Take:
- Verizon may be late to the “truly unlimited” game (as rivals AT&T and T-Mobile have previously stopped throttling customers on their top-end plans), but the carrier’s modifications have turned the “Get Now” plan into the most comprehensive plan in the market. The 50 GB mobile hotspot bucket is unmatched as AT&T and T-Mobile’s top plans come with 40 GB of mobile hotspot. The mobile hotspot feature is an important marketing engine as a third of smartphone customers actively use this feature on their devices.
- The timing of the new rate plan announcement is tied to Verizon’s upcoming (on January 19) C-band 5G network launch, which will give the carrier the necessary bandwidth to support the anticipated increase in consumption. Verizon and AT&T’s ongoing battle with the aviation industry has been settled with the two carriers giving concessions on network debut timing in select markets; subscribers of the new plans in these markets will put additional pressure on the network until the C-band spectrum kicks in at the end of the year.
Visible jumps on the“Test Drive” bandwagon
Verizon-backed digital MVNO visible has recently begun marketing a new campaign, offering prospect customers a 15-Day free service trial via an eSIM activation. The trial is limited to customers who own an unlocked iPhone X, 11, 12, or 13 series smartphone. The trial is activated by scanning a QR code available on Visible’s website; customers with the aforementioned device will have their eSIMs activated with a new phone number (which they can keep after the trial or port-in their existing number should they decide to switch) without the requirement to enter any credit card information.
The NPD Take:
- eSIM-based activations continue to increase in popularity as most of the new mid-tier and upper segment phones support eSIM-based dual SIMs. According to NPD Connected Intelligence Mobile Connectivity survey, 36% of smartphone owners are aware of the eSIM activation process (AT&T and T-Mobile customers over-index with 41% awareness). As unlocked phones get more popular, we should expect to see more carriers joining Visible, Mint, or T-Mobile to market eSIM-based free trial services. According to the same survey, 53% of smartphone owners are very or extremely interested in free trial offers from other services providers.
- Visible’s parent Verizon is more vulnerable to these free trial offers as all Verizon phones are automatically unlocked by the carrier due to an FCC mandate. Verizon’s new prepaid arm Tracfone is also subject to the same regulation, thus it will not be surprising to see a higher adoption rate of free trials among Tracfone phone buyers as their phones will be unlocked within 60 days of activation.