Author(s): Raghu Gopal
This week, T-Mobile US officially launched the first of its long-rumoured, own-branded smartphones. Called Revvl, the device offers consumers a huge level of hardware value. The phone is priced at $125 and features a 5.5-inch display, 32GB of on-board storage, 2GB of RAM, a 13-megapixel rear camera, a five-megapixel wide-angle front camera and a 3,000 mAh battery. It also has a fingerprint sensor on the back, an unusual feature at such a low price. Revvl ships with Android 7 Nougat running on a 1.5 GHz quad-core MediaTek MT6738 chipset. The handset covers all of T-Mobile's LTE bands.
Customers can purchase the Revvl phone outright for $125 or on a device payment plan consisting of a $5 dollar payment upfront and 24 further instalments of $5 per month. It can also be leased through T-Mobile's Jump on Demand plan, which requires an 18-month agreement. This service allows users to upgrade to another device every 30 days, an extreme level of turnover that's likely to be more social engineering than practical reality. A condition is that when devices are turned in, they shouldn't show excess wear. T-Mobile offers its device insurance plan for all post-paid users and emphasises it for those leasing handsets.
Revvl isn't T-Mobile's least-expensive smartphone in its portfolio. The carrier offers a five-inch Coolpad Android phone for $100, or $4 on its payment plan. But for an additional $1 per month, the new phone provides significant value for money and could make $5 per month an inflection point for introductory smartphones.
It's perhaps no coincidence that a few days ago T-Mobile also introduced a new lower-priced unlimited plan for subscribers that are 55 years of age or older. For $60, a customer can get two unlimited lines, which compares with $100 for younger subscribers. The carrier is eager to move as many customers as possible to its unlimited T-Mobile One service and away from legacy plans and basic phones. It seems unlikely that it will attract many experienced smartphone users from rival carriers, but it could create a league of new Android users.
The manufacturer of Revvl is Chinese TCL, which also licenses the Alcatel and BlackBerry brands for smartphones. We believe that T-Mobile is selling its new phone close to its wholesale price.
For T-Mobile, the device should offer further differentiation in the market at a time when all four leading carriers are now offering unlimited data tariffs. It will hope the move will drive continued customer gains after the carrier raised full-year guidance for post-paid net additions on the back of a strong second quarter of 2017.
Revvl is a generic device that swaps a well-known brand for extra value. It won't alter the smartphone landscape in the US, but it could allow T-Mobile to convert technology holdouts to dedicated smartphone users.