As the smartphone market reaches peak saturation, wireless carriers are scrambling to find new sources of revenue. Consumers simply don't have many compelling reasons to upgrade their phone each year anymore. Boosting the camera by a couple of megapixels and making the screen 10% bigger isn't going to cut it.
Fortunately for carriers, with the rise of IoT and 5G technology, they have a lot of options to choose from.
The top four American wireless carriers have been working hard over the past year to diversify their offerings.
New tech = new products
As we've discussed in the past, new tech is opening the door to a whole new array of products. Increased mobile internet speed, in particular, is what's kicking down most of these doors.
T-Mobile released SyncUp Drive, an aftermarket plugin that transforms any car with an OBD-II (on-board diagnostics) port into a 4G LTE hot spot. For $150 a year, subscribers get access to vehicle diagnostics, driving behavior analysis, vehicle and location monitoring, speed alerts, vehicle diagnostics, and more.
Recently, T-Mobile even added roadside assistance to the package.
Could anyone have predicted our phone providers would one day give us roadside car assistance?
Focusing on services above all else
However, physical products aren't what they used to be. We're in the middle of the "Netflix era". Many large industries are making the shift towards service-based businesses, often via subscriptions. With service-based products, the potential for revenue growth is much higher.
Verizon, for example, is preparing to launch their own streaming service to compete with Netflix, Amazon, and Hulu. It's no secret that video streaming is a massive business, with Netflix leading the way. Verizon wants a piece of the pie, and has a customer base of over 140 million to push their service to.
And what about all of those mobile phone repair shops, the ones you bring your phone to when you crack your beautiful screen? How is it that none of these carriers have tried to steal that massive business?
Well, Verizon is finally ready to do it. Of course, they wouldn't dream of taking their focus off sales and training their associates how to repair phones. Instead, they've partnered with a mobile phone repair company to have them do the dirty work. Now, they can simply sell this as another service they offer.
AT&T is getting in on the action as well, probably more than any other carrier. In fact, they've decided to reduce their selection of smartphones in favor of focusing on selling additional services to customers.
"AT&T is instead largely putting its hopes behind mainstream, widely available phones like the Apple iPhone or the Samsung Galaxy line of devices. 'AT&T's new approach appears to assume consumers will buy either an iPhone or Samsung flagship, with reps instead focused on selling consumers a differentiated portfolio of services, not devices,' he wrote."
And let's not forget AT&T's recent purchase of DirecTV. They've already begun to bundle their phone plans with their TV and streaming offerings.
AT&T also has the boldest vision for the future of IoT and smart cities. Their MWC booth was impressive, incorporating augmented reality to share their vision. AT&T talked about how their 5G tech would allow them to connect to essentially everything, enabling seamless communication and cooperation across a wide range of devices.
It's clear that AT&T is investing heavily in the future.
Besides TV, what else do people spend most of their time consuming? Music.
Sprint recently bought a large stake of Tidal, Jay-Z's music steaming service that is attempting to take on the big guns, Spotify, Google Music, and Apple Music. Sprint customers will have “unlimited access” to exclusive Tidal content, that will automatically be bundled with most of Sprint's phone plans.
And there it is again. That word. Content.
The new battlefield is ownership and distribution of content. Our phones (and other devices like TVs and tablets) are our principle way of consuming content. It's where our eyeballs spend most of our time each day. Wireless carriers are fighting for screen time on our devices. More time = more money.
Competition breeds innovation
When one market saturates, a new one emerges. When it comes to the wireless industry, this is true multiple times over.
This increased competition and market expansion is great news for both consumers and retailers. Consumers get more choice and better value, and retailers have new sources of revenue growth to pursue.
One thing is for sure, though. As a wireless retailer, you cannot stand on the sidelines and simply watch this take place. Get in the game, and get involved in the transformation of the wireless industry!
For tips on how you can do that, check out these handy articles we recently wrote:
- Idle Time is Killing Your Business: Here's What to Do About It
- 6 Simple Ways to Empower Your Frontline Reps Right Now
- 10 Ways Prepaid Retailers Can Retain Their Customers
- Keeping Your Sales Team Busy Is a Mistake
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