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T-Mobile’s US problems are bigger than iPhone

t-mobile-mytouch-4g-dummy-phone

T-Mobile's flagship (dummy) phone, the MyTouch 4G. If you want to try one, you'll need to ask first.

T-Mobile posted some disappointing results for its US division last week and laid the blame at the door of the iPhone, which is not available on T-Mobile US.  Analyzing that comment, it’s important to ask why this should this be a bigger problem for T-Mobile than for Verizon or Sprint, who are also sans iPhone.

To my mind there’s a simple answer and I’ve said it before.  T-Mobile needs to have a good look at their stores and figure out how to get more people into them.  The Sprint, Verizon and AT&T stores near me are always busy with customers fiddling with phones, trying them out and deciding which device works best for them.  The T-Mobile stores are typically empty because they have pretty near nothing interactive on display.  Their in-store demo phones are dull-screened plastic dummies and would-be customers cannot get a feel for how they work.  A friendly T-Mobile salesperson did pull out a working MyTouch 4G for me when asked, which is the carrier’s flagship and heavily advertised iPhone competitor, but the version on general display is the plastic dummy.  It’s the opposite of the “come and play with me” iPhone displays in AT&T stores.

It would be like going Best Buy and having to decide which TV to buy without actually seeing them working.  At least if you buy a $1,000 TV and get bored of it, you can move it to the bedroom and get a new one next year.  With phones we’re talking about potentially getting locked-in for two years based upon a plastic dummy.  I think most nervous consumers would say no thanks to that idea.  Although plenty of consumers buy gadgets on-spec through mail-order channels, that doesn’t cut it for many consumers.  Those folks need to build trust in a device and understand how it can benefit them before buying.

The CEA told us this week that consumers love to just play with gadgets, even if they have no intention of purchasing.  These opportunities for test drives are essential for gradually familiarizing consumers about a company’s products, especially for T-Mobile given the carrier’s current campaign to educate consumers about its 4G products.  Sprint showcases its 4G devices in store for consumers to experience, Verizon does a similar job for its Droid brand and of course there is a dedicated iPhone demo area in AT&T’s stores.  The message to T-Mobile is clear: entice customers into the store with the campaign, but then give them things to play with when they’re there and they’ll start drinking the Kool-Aid.

Neil Berman

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Nov 13, 2010 Posted by | Analysis, Mobile, Rants | | Leave a comment

Did we just live through “Crazy Pricing Week”?

First was the Logitech Revue Google TV at $299, then the Cisco Umi home videocon came along at $599 and yesterday we saw rumors tha the Samsung Galaxy Tab might launch at $399 on a 2 year contract with T-Mobile.

If that last one turns out to be accurate, it could end up as a disaster for the Samsung Galaxy Tab.  As I mentioned a few weeks ago, it looks like the Samsung Galaxy Tab will not have the software and app ecosystem to compete effectively with the iPad.  Heck even Google said Android 2.2 is not designed to run tablets.

These issues might be surmountable if the Galaxy Tab were to be priced competitively – and I mean something like $199 on contract and say $399 contract free.  The rumored $399 with a contract make it seem irrelevant, since anecdotal evidence suggests that only a small percentage of iPad owners have subscribed to the ontract free AT&T  data plan, which starts at just $15 per month.  The rumors also suggest that the unsubsidized Galaxy Tab might cost $649, which is slightly higher than the 16GB iPad 3G.

Samsung does have a history of expensive tablet pricing.  The company’s Q1 7-inch Windows XP tablet and Q1 Ultra follow-up device were too expensive to win significant consumer attention.  If the Galaxy Tab pricing rumors are true, expect to see limited numbers out and about.

Sheesh, that really was the week of crazy pricing.  Sure sales might have been down recently due to the weak economy but the way to win back sales is surely to price appropriately and look for volume buildup rather than having to endure price cuts that anger early adopters.  Apple already went through that with the original iPhone launch and hwere wise to avoid a similar pitfall with the iPad.

Neil Berman

Oct 11, 2010 Posted by | Analysis, Apple, Home Theater, Photo & Video, Mobile | , , , , , , , , , , , , | Leave a comment

   

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