The United States national wireless carrier, T-Mobile US Inc. (TMUS - Free Report) has launched promotional offers for two new LG handsets, G6 and V20.
The operator launched buy-one, get-one-free deals on both G6 and the V20 for users who buy phones on T-Mobile’s equipment installment plans. Customers who add a line will receive a rebate in the form of a prepaid MasterCard of up to $500. The LG G6 handset is priced at $500, while the V20 carries a $480 price tag through T-Mobile.
Earlier this month, T-Mobile US had unveiled its first branded smartphone, the REVVL and promoted more models on its JUMP! On Demand handset leasing programme. Accompanying the phone’s launch, the company has also adjusted its JUMP! On Demand. T-Mobile US is marketing it as an affordable option because it'll only cost $5 a month with no down payment through the company's Jump! On Demand service, or $125 up front.
Sprint’s Similar Move
On a similar note, Sprint Corp. (S - Free Report) offered a $260 discount on the Essential PH-1, to leverage its exclusive deal to carry the first phone from Essential Products. Sprint will be the exclusive network carrier for the new phone Essential PH-1. Essential PH-1 will be available in Sprint’s retail stores, its online and telemarketing channels and through Best Buy Co. Inc. (BBY).
The Essential PH-1 is a high-end smartphone that supports Android software developed by Alphabet Inc.’s (GOOGL - Free Report) Google. The handset features a Qualcomm Inc.’s (QCOM - Free Report) Snapdragon 835 processor, a 128 GB internal storage and a 360-degree camera. Essential PH-1 is priced at $700 and is slated to ship in the next few weeks.
The promotions by T-Mobile and Sprint will open up opportunities for U.S. operators and their handset partners.. More smartphones are expected to be released from heavyweights like Apple (AAPL - Free Report) , Samsung and Google, while Motorola is expected to refresh its handset lineup as it adds carrier partners.
The domestic smartphone market soared 14% year over year in the second quarter of 2017. Demand for prepaid and postpaid handsets rebounded after a discouraging performance in 2016, as per latest data from market research firm, Counterpoint Technology Market Research.
U.S. carriers reported nearly 1.25 million net postpaid phone additions during the quarter, with Verizon’s net gain of 614,000 postpaid and 19,000 prepaid wireless customers, which is a major comeback. We believe that this huge user addition came on the back of Verizon’s impressive unlimited data plans.
The increasing competition will intensify in the coming weeks as carriers seek to leverage new phones to expand their market share in advance of the crucial holiday shopping season.
Such launches combined with attractive promotional offers will lure customers from rival carriers.With increasing smartphone launches, we expect aggressive promotions by the company which may impede margins in the coming quarters. The marketing costs of advertisements and promotions also lead to high cash burn and heavy losses for the company.
Zacks Rank and Price Performance
T-Mobile US currently carries Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Over the past three months, shares of T-Mobile US have declined 7.08%, compared with the 0.98% loss of the industry it belongs to.
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