Verizon Wireless Subject to Highest Subsidies for Mobile Devices in US, Says
OYSTER BAY, N.Y. -- June 20, 2013
ABI Research reports that the average US implied subsidy for devices offered
as part of Verizon Wireless’ handset line-up is on average US $447, which is
over $40 more per device than the industry average and a staggering $114 more
than the average device offered by US Cellular. Handset subsidies are fast
becoming one of the major focus items for carriers as they see smartphone
markets mature, service revenues plateau, and total traffic generated from
advanced devices eat into profitability. Attention has fundamentally shifted
from subscriber additions to maintaining a profitable business for carriers in
the worlds most advanced cellular market.
Stuart Carlaw, chief research officer, stated: “Subsidies are a prime
battleground for carriers in the US market. Recent competitive moves from
carriers like T-Mobile mean that the conflict between OEMs looking to maintain
or grow ASP through feature creep and operators looking to shore up margins
and reduce subsidy is about to enter a new phase.” These results need to be
viewed in light of device capabilities and also subscriber base dynamics of
individual carrier business; nonetheless, there are clear opportunities to
improve business performance through a more targeted approach to subsidy
Senior practice director for devices, Nick Spencer, added: “Operators need to
focus on retaining and acquiring profitable customers, rather than continuing
to obsess about market share, but handset offers remain the key driver of
customer churn. Verizon Wireless clearly feels it has the right combination of
efficiency and scale to ensure the majority of these aggressively subsidized
contracts offers will provide a profitable—or at least break even—customer
lifetime value by the end of the contract.”
This information is found in the ABI Research Device Portal
(http://devices.abiresearch.com/): a comprehensive guide to all mobile
handsets. Data is sortable by manufacturer, carrier, price band, subsidy
level, sales channel and ICs.
ABI Research provides in-depth analysis and quantitative forecasting of trends
in global connectivity and other emerging technologies. From offices in North
America, Europe and Asia, ABI Research’s worldwide team of experts advises
thousands of decision makers through 70+ research and advisory services. Est.
1990. For more information visit www.abiresearch.com, or call +1.516.624.2500.
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