Galaxy S4 Delay: Does Samsung’s Screw-Up Give AT&T an Edge?
Due to inventory delays, Samsung’s (SSNLF.PK) flagship Galaxy S4 smartphone won’t make its U.S. debut today, as planned. The phone was supposed to go on sale on T-Mobile’s website this morning after the company successfully angled to be the first carrier to offer the device in the U.S. Now T-Mobile won’t start selling the phone until April 29, while Sprint Nextel (NYSE:S), which was aiming for an April 27 release, will also be forced to push back its introduction. The phone is getting a staggered rollout in the U.S., with AT&T (NYSE:T) and Verizon (NYSE:VZ) planning their own debuts in the coming weeks.
T-Mobile blamed the postponement on “an unexpected delay with inventory deliveries,” while Sprint cited “unexpected inventory challenges from Samsung” in its own statement saying the rollout would be “slightly delayed.” Sprint still plans to start selling the phone online on April 27, which means it will beat T-Mobile in its online rollout, but its in-store debut will have to wait until inventory becomes available. T-Mobile is still planning to debut the device in stores on May 1.
The Galaxy S4 is supposed to be Samsung’s next iPhone competitor, but has so far been met with mostly tepid reviews. “Several of its advanced features don’t work very well, and it feels more like a collection of functions than a smoothly integrated experience,” said Bloomberg’s Rich Jaroslovsky in his review.
Not all reviews were so negative, but with supply chain concerns arising from the delay, the phone may be crippled right out of the gate. Samsung’s decision to debut the phone with the fourth-ranked U.S. carrier rather than the number-one or number-two carrier is also suspect. So far, the company has not commented on the delay.
The hiccup, whatever its cause, could result in AT&T having a leg up on the competition. While T-Mobile will have to delay the phone’s online availability by five days, AT&T somehow has an unexpected inventory allotment, which has allowed the carrier to begin its early pre-order deliveries, according to tech blog The Verge. AT&T has been telling early pre-order customers they may be receiving their devices as soon as April 25, though the carrier originally claimed it would ship out pre-orders by April 30 for a May 3 delivery.
AT&T will also be the first carrier to have the phone on sale in stores — tweeting on Sunday that the 16GB model will be available to purchase on April 27, the same day Sprint and T-Mobile are expected to have the device for sale online. No news yet on when Verizon will begin shipping the phone, but it plans to begin taking pre-orders tomorrow, ahead of its going on sale in retail stores on May 30.
T-Mobile might be losing some of its edge on this one, but the carrier isn’t all frowns, as it’s still got a few tricks of its sleeves. Firstly, its new pricing plan allows it to offer phones at an initial discount compared to other carriers. While competitors like Verizon and AT&T offer Apple’s (NASDAQ:AAPL) iPhone for $199 with a two-year contract, T-Mobile offers the phone for just $99, with $20 payments each month until the phone is paid off in full.
While other carriers “subsidize” the cost of the iPhone, which means you’re not technically paying for the phone, they do charge higher rates and rope customers into two-year plans. Ultimately, by going contract-free and creating a payment plan for the iPhone, T-Mobile is able to charge significantly less for its monthly service plans. Ultimately, an iPhone user’s bill is cheaper, per month and for the two-year period, with T-Mobile than with any of the other carriers.
The iPhone may be T-Mobile’s most popular new addition, but this contract-free payment plan is being applied to all the carrier’s smartphone offerings. The Galaxy S4 will start at $149.99, with monthly, interest-free installments of $20 to be paid for 24 months. AT&T’s Galaxy S4 starts at $199, and comes with a costlier monthly service plan and a two-year contract.
Now, with the same popular phones as its competitors, and lower pricing, T-Mobile has the chance to steal away some customers. However, network size will certainly play a factor, as will reputation. It remains to be seen how much of a boost, if any, T-Mobile’s new strategy will give the carrier.
Don’t Miss: How Could Apple Hurt Its Suppliers?