Category Archives: Mobile

Mobile Faceoff Mid-2015: Samsung vs. Apple

Galaxy S6 phone and iPhone 6 displayed side-by-side

With the top three selling mobile phones in the United States produced by the two companies, it may seem that the rivalry between Samsung and Apple is settling in for the long haul. However, the most recent numbers provide a window into how tumultuous the market is in the highly coveted wireless industry. Apple’s newest launches, the iPhone 6 and iPhone 6 Plus, have enjoyed considerable success, in large part because of changes to the operating system, but more importantly, finally increasing the screen size in an effort to appeal to more business users. Samsung’s most recent launches, the Galaxy S6 and the Galaxy S6 Edge, generated considerable buzz from consumers upon their release, but industry analysts speculate that this interest diminished quickly due to a lack of innovative design in the newest Galaxy models.

Despite having the iPhone 6, the number one selling phone, Apple actually lost ground in overall market presence among smartphone users in the first part of 2015. Around 80% of the American population has a smartphone, of which 31% are running a device that has iOS. Compared to this total, roughly 66% of smartphone users have a device running the Android platform. However, in terms of overall profit, Apple saw significant gains during the first few months of the year. This growth has been, in large part, sustained by foreign interest. A prime example of Apple’s profitability in a year when there are no major upgrades planned for the new iPhone is the company’s request for the production of an additional 92 million units. Most of these are destined to be sold in China, although the size of the request to Apple’s manufactures has led some analysts to speculate that the iPhone 6S and iPhone 6S Plus may have more upgrades than initially planned.

Meanwhile, Samsung is scrambling to address its sales issues. Over the last thirty-six months, the company has seen its wireless profits fall every quarter. Part of the issue with the latest phone launch was related to production trouble for the Galaxy S6 Edge screens. Even worse for Samsung though was the negative publicity generated by poor reviews on social media for the S6. Complaints on Facebook and Twitter highlighted underwhelming battery life, problems with clarity when completing calls, and overall concerns that the phone itself was unreliable. While its main line of wireless phones has not lived up to expectations, Samsung’s specialty phones, particularly the Active branch that is designed to survive screen scratches, exposure to water, and the occasional drop onto the floor from table height, has seen remarkable growth. Until it can address the reliability concerns associated with its flagship phones, Samsung may turn its attention to consumers who are looking for a sturdy mobile device that does not require a bulky, limiting case.

T-Mobile Expands Offerings as Customer Totals Increase

T-Mobile coverage map showing all of North America

Over the first six months of 2015, T-Mobile has seen an increase in overall customer totals that was higher than industry analysts expected. During the recent release of subscriber figures, during the second quarter of the year the company added over 2 million new customers across pre- and post-paid accounts. This growth brings the company’s customer total to just under 60 million which, despite the increase, maintains T-Mobile as the fourth largest carrier behind Verizon, AT&T, and Sprint. Commentators in the wireless industry believe that this growth will continue throughout the remainder of the year, although long-term forecasts suggest the promotions T-Mobile has used to elevate its presence in the market will not be sustainable.

In an effort to preempt the predictions that it will not be able to sustain its growth beyond this year, T-Mobile has announced the extension of existing promotions and new ones that it hopes will allow the company to enjoy a larger footprint, both domestically and internationally. One of its most ambitious plans was the offer for any Verizon customer to try T-Mobile for two weeks, absolutely free. The latest reports indicate that this plan was successful during the first quarter but has tapered off during the second quarter, although similar programs for AT&T and Sprint transfer customers have not seen any signs of slowing down.

Similarly, T-Mobile has expanded its two most popular data plan packages. These packages both cost $100 per month, but one includes two phone numbers with unlimited LTE data, while the other offers four phone numbers with 2.5 GB of data per line. Having satisfied its customers by providing an unlimited data plan, T-Mobile is now turning its attention to the part of its consumer base that wants to upgrade phones on a frequent basis. With a new program titled Jump on Demand, for a monthly fee of $10, T-Mobile customers will have the option to upgrade their phone three times per twelve months.

As innovative as the program is to allow multiple phone upgrades annually, T-Mobile’s plan to offer coverage throughout North America, including Mexico and Canada, without roaming fees is being heralded as a game changer. In particular, this plan is attracting attention because it will be available to customers sooner than the plan proposed by AT&T months ago, which will offer similar perks. Under T-Mobile’s plan, subscribers will be able to text, call, and use web services, like email and GPS applications, while in Mexico or Canada without incurring any additional fees. The plan will go live by the start of August 2015.

Verizon FiOS Growth and Verizon’s Streaming Video Service

Combined Verizon and AOL logos.

Analysts remain conflicted over the potential growth of Verizon FiOS as 2015 continues. New subscriber projections suggest there will only be around 90,000 additions during the second quarter, which are 25,000 fewer than had been anticipated. To put these totals in perspective, for the same period of time in 2014, FiOS subscribers increased by over 135,000. However, despite these underperforming totals, the expansion of Verizon FiOS, especially in parts of New York, Texas, and New Jersey, is expected to increase substantially over the next eighteenth months.

 

Even if FiOS numbers remain down, one of the reasons that observers are optimistic about Verizon’s financial growth over the long haul is that it plans to release its own video streaming service by September 2015. Over the past few months, Verizon has reached agreements with a number of content providers and is continuing talks with even more. While the initial target is to provide around 25 channels to subscribers, including content from Comedy Central, MTV, Food Network, HGTV, and the Travel Channel, the yet-unnamed service will also include video shorts produced by AwesomenessTV, a subsidiary of DreamWorks. While these offerings will whet the appetite of many consumers, Verizon has made clear that it is especially interested in a younger demographic. As a result of this focus, it has established agreements with ESPN, the ACC Network, CBS Sports, and 120 Sports. Content from these networks will include some NFL, college basketball, and college football games, but broadcast restrictions will apply.

 

Although complete details of the Over the Top (OTT) streaming service have not yet been announced, it is clear that Verizon plans to have an ad-based model, similar to what Hulu Plus does, compared to the pure subscription model used by Netflix. While Hulu Plus has not enjoyed the same subscriber growth as Netflix, Verizon hopes to change this by benefiting from its recent purchase of AOL. Since its days of providing users dial-up internet access, AOL has transformed itself into a leader in online advertising. Survey results produced by the advertising industry have shown that AOL is successful in reaching a target audience more than 55% of the time, a figure that is the envy of all advertisers besides Google. Another aspect tied to the success of the ads on the new Verizon service is that the company hopes users will enjoy the content not only at home, but also on their mobile devices. This means streaming over Verizon’s existing wireless network while consuming a lot of data. However, realizing that the threat of data overage fees may turn off some consumers, Verizon has established an agreement in which the advertisers will help subsidize part of the cost for data used while viewing video content.