T-Mobile today begins selling the Apple iPhone 5—its first-ever iPhone in a market largely controlled by the Apple device—while over at AT&T, the HTC First, otherwise known as “the Facebook phone,” is now available.
T-Mobile and HTC each badly need for the phones to be difference-makers.
T-Mobile has put itself on a track for a turnaround. Thanks to AT&T’s failed attempt to purchase it in 2011, T-Mobile came into the money and spectrum it needed to begin developing a Long Term Evolution (LTE) network, and last month it finally launched the 4G flavor in seven cities. (As with the iPhone, it was the last of the top-four carriers to count the technology among its assets.)
T-Mobile now has a charismatic new CEO, John Legere, a more interesting marketing campaign and—in an industry that has essentially had two business models for selling smartphones, subsidized or prepaid—a new, more consumer-friendly way of selling phones.
And, of course, after years of rumors and months of waiting, it now also has the iPhone 5, and an updated model, at that. Legere, announcing March 26 that the device would go on sale today, said Apple had updated the device, enabling it to connect on more spectrum bands for an even better user experience.
It can be purchased, by consumers who qualify, for $99 down and 24 monthly payments of $20. It’s being sold independent of a data plan, which is contract-free and so can be abandoned at any time. The phone can be upgraded at any time, and if you want to ditch it, there are options for walking away.
T-Mobile, during its fiscal 2012 fourth quarter, lost 515,000 postpaid subscribers. On April 3, it shared preliminary results from its first quarter, which suggest that the above changes are having an impact. During the first quarter, it lost 199,000 postpaid customers—a 61 percent improvement over the fourth quarter and its best branded postpaid churn percentage in four years.
“The best is yet to come!” Legere said in the April 3 statement.
HTC is hoping the same is true for it. Since its heyday with the Evo 4G in the early days of Android, HTC, despite making several nice phones, has been unable to compete against the Samsung PR machine and the Galaxy S line, which has enamored consumers with increasingly larger displays.
HTC’s most recent superstar is the HTC One, which includes an impressive and unique camera that wound up being the undoing of HTC’s fiscal first quarter. The camera couldn’t be made quickly enough by suppliers, and instead of 80 markets during the first quarter the phone launched in just three and HTC posted its lowest profits since it began announcing them in 2004.
On April 4, Facebook introduced the HTC First, calling it “the first and only smartphone built to feature Facebook Home, which puts your friends at the heart of your phone.”
The First puts Facebook Friends’ updates and photos on the devices home screen, so the social media feed is the first thing a user sees.
Ovum, which has forecast that social messaging cannibalization of SMS revenues will grow from $32.6 billion in 2013 to more than $86 billion in 2020, has called the First “a great experiment for Facebook,” which will gain much if the First is successful and lose little if it’s not.
HTC isn’t in a great position to deal with a losing device, though if a “Facebook phone” resonates with users, Sterne Agee analyst Shaw Wu has written that Samsung could sign up to make the next one.
AT&T, for its part, has decided to put its weight behind the First. It’s not only the exclusive provider of the phone, but it plans to make it its flagship phone for the spring, according to a report from Cnet. Despite selling the One, and having the Samsung Galaxy S 4 coming soon, AT&T “is promising to give [the First] its most prominent position in stores when it launches,” said Cnet.
AT&T will sell the First for $99.99 with a new two-year contract.
Are you planning to buy either device? We welcome your comments below.