The Prepaid Press - February 15, 2008 - (Page 8)

PREPAID WIRELESS February 15 · 2008 - 8 Prepaid Wireless Handsets A Review of Brands, Bells and Whistles By Arlene Hauben Prepaid wireless providers are known for adding value on the resale of services by creating brand appeal, distribution channels, and other smart features. Touchscreens with cool icons and color help sell. Look at AT&T’s success due to the iPhone. The operator sold 2.7 million new connects last year. As competition for bandwidth heats up, what will drive the MVNO marketplace? Will content or high function handsets be the clincher? Let’s review some of the handsets currently being offered by mobile operators. Camera phones and music hold the spotlight Handsets that double as cameras are better than ever. Since the camera phone was introduced in 2000, it has grown in popularity and been enhanced. Handsets with picture taking capabilities now outnumber stand-alone digital still cameras. These phones have followed the lead of the still camera by improving the image’s resolution from 0.3 Mpixels or below to up to 7 Mpixels in some models. The diminutive Super Slice is offered from Virgin Mobile, the first MVNO carrier in the U.S. It comes with Bluetooth technology and 0.3 Mpixels. The Virgin Mobile Special Edition comes in a vibrant red color with real music ringtones, Web Browsing, Mobile IM and email. The Wildcard has a miniature keyboard, Bluetooth, and a 1.3 Mpixel camera. Music features are especially important to teens and young adults, but prepaid plans that offer music capable handsets are scarce. One is the Kycocera Slider Sonic, which allows paid MP3 downloads, has a speakerphone, video camera and even TransFlash memory expansion. Sold by Virgin Mobile, the carrier aggressively markets prepaid services to the younger generation that wants affordable, stylish phones. Boost Mobile also aims squarely for the youth market. Snazzy versions of Motorola’s handsets offer some features not available on Virgin Mobile, such as camera phones with video recorders and MP3 players. Boost is supposedly the only prepaid carrier with PTT (push to talk) technology. “Smart MVNOs are positioning themselves directly against the carrier and diversifying away from the high churn, low revenue models,” commented Bruce Hallinan, Vice President, Telecom, Blackhawk Network. “The Net 10 ‘no evil’ campaign is a great example.” Net 10 from Tracfone lets you track your minutes and days of service with a color screen Motorola handset. The operator provides mobile service for 10 cents a minute, no daily or monthly fees; no contracts or cancellation fees. Therefore, no evil. Tracking your children GPS tracking is a valuable function when you want to locate your family, especially your children. The Firefly glowPhone gives parents control. It comes with a full color screen, unique keypad, built-in games, ringtones, and wallpapers. You pay as you go to keep the family connected. Firefly Mobile offers a great value pack that includes everything. It’s recommended for 8 -10 year old children. Garmin International Inc., a unit of Garmin Ltd. and the world’s leading GPS manufacturer, recently announced that it is becoming an MVNO with the mobile nuvifone. The handset is an all-in-one, sleek and slim, touchscreen device that combines a premium browser, and cutting-edge personal navigator. It integrates a 3.5G mobile phone, internet browser, data connectivity, personal messaging, and personal navigation. It is too soon to tell if the nuvifone will be a prepaid offering. Rich Stupansky, a veteran in the prepaid wireless industry, thinks that high function handsets are the way of the future for MVNOs, noting, “The handset price points are a major concern, but certainly customers who are added will not churn as quickly with full data and GPS tracking capabilities.” Price point matters One of the drawbacks for consumers who want new cutting edge functionality can be the price point. Tuong Nguyen, a handset analyst at Gartner, remarked that prices are a little hefty. “The service plans are kind of high, and on top of that, you’re paying for devices with little or no subsidy.” “The vast majority of handsets sold on prepaid plans in the US today sell for under $50,” says Blackhawk’s Hallinan. “Mobile operators have attracted customers by subsidizing phones and offering low-end models with limited features.” Hallinan thinks that as the tariff differences between prepaid and subscription plans have become minimal, customers are now demanding more stylish, feature rich handsets. Prepaid customers are looking for flip phones with text messaging, music capability, higher pixel lenses, Bluetooth, and web browsing. Mobile phone operators are promoting highend handsets with prepaid plans. Blackhawk’s Hallinan mentions some of the best selling handsets. These are: the RAZR V3 for $129 selling on the AT&T Mobility website, and Palm Treo for $269 on the GoPhone plan. Verizon has the dual hinge Samsung u740pp with Bluetooth, V Cast and Mobile web 2.0 for $185 on their prepaid service, Impulse. Virgin Mobile knows their target market and has two models with QWERTY keyboards and a ‘slider’ to appeal to the messaging crowd. These are just under $100. In a weak economy, price point certainly affects buying patterns. Mark Flanagan, President/CEO, Prepaid Wireless, says “Basic lowpriced phones are the thing. Cheaper phones are driving the market.” Flanagan believes that the prepaid customer wants to make cheap calls. Also, Flanagan cites problems for MVNOs that are faced with transshipping issues and lost business. He is referring to unscrupulous operators that build their inventory by buying handsets at stores like Wal-Mart, and then resell them at a higher price in other markets. Cool Phones So what will be the next big thing in handsets? According to Doug Grant, Director of Business Development for RF and wireless systems at Analog Devices, feature phones will be spurred by improvements in key peripheral functions and user interfaces. “Surprisingly, little of the attraction of new handsets at the consumer level is related in any way to the air interface or data rate supported by the air interface,” said Grant. “Users are more attracted to color displays, customizable ring tones, and cameras. Phones have evolved as fashion statements and status symbols.” If users continue to be more impressed by the handset than the content, the best marketing strategy for MVNOs might be the high function handset. But mobile operators should remember that even the coolest handsets lose their luster with the fickle cell phone user. With no big wins since the RAZR, Motorola may spin off its handset business. The giant’s handset unit has had trouble coming up with a successor to the popular RAZR phone, and in last year’s third quarter, it fell to third place in worldwide sales behind Samsung. As we go forward, MVNOs should remember the words of Marshall McLuhan, “high priest of pop-culture” in the late 20th century: “The medium is the message”. Arlene Hauben is a practicing journalist for over 25 years and has written for a number of publications in South Florida. She can be reached at asandra44@yahoo.com. “How on earth do I make a phone call with this thing?!?” http://www.allstateprint.com http://www.allstateprint.com

Table of Contents Feed for the Digital Edition of The Prepaid Press - February 15, 2008

The Prepaid Press - February 2008 Beachfront Property for Sale Cardholder Facing Systems Contents The Retske Report: Getting the Word Out 5 Minutes With Mark Flanagan, CEO of PrepaidWireless.com Regulatory Rundown: Mid-Winter Update 2008 Prepaid Wireless Handsets Consumer’s Union Raps Wireless Industry Prepaid Reviews Launches Canadian Website Maginpins and TúYo Mobile Form Alliance Prepaid Wireless in Brief Boost Mobile Introduces New $1/Day Chat Plan Mobile Voice to Overtake Fixed in Europe Prepaid Wireless Roundup Another Kind of Prepaid Calling Spot Rates VSNL Wins ATLANTIC-ACM Award The Legal Line Calling Cards in Brief Sapotek Partners with DigiLinea Pactolus Goes Live at Cable MSO Low-Income Market Initiatives to Drive Mobile Banking Payments in Brief Monitise Americas Expands Payments Network Charge Anywhere Mobile POS Wins Award Hypercom Introduces System for Small Merchants TIO Networks Announces TIO Prepaid MasterCard NPBCA Makes Leadership Change A Walk Down the Aisle Branding Your Retail Store Retailers Welcome Senate Approval of Stimulus Bill NRF Forecasts 3.5 Percent Growth in Retail Sales Cyphermint Teams With DHL Retail Focus in Brief Our Advertisers Contact Us

The Prepaid Press - February 15, 2008

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