TracFone's flat-rate Straight Talk service will launch its first smartphone running Google's (NASDAQ:GOOG) Android platform in September, according to BTIG Research analyst Walter Piecyk.
Samsung Galaxy Precedent
According to Piecyk, the carrier will launch the Straight Talk Galaxy Precedent, made by Samsung, for $150. The analyst noted that the smartphone is strikingly similar to the Samsung Prevail, which Sprint Nextel's (NYSE:S) prepaid brand Boost Mobile sells for $180. The Prevail runs Android 2.2, has a 3.2-inch touchscreen display, and a 2-megapixel camera. Representatives from TracFone, Sprint and Samsung did not immediately respond to requests for comment.
A blog post on Straight Talk's website promises the Android-powered Galaxy Precedent is "coming soon," but the post does not provide details, including a launch date and a price.
The device could represent a threat to flat-rate players MetroPCS (NASDAQ:PCS) and Leap Wireless' (NASDAQ:LEAP) Cricket, which have bet heavily on Android and are trying to attract new smartphone customers. Thus far, Straight Talk's smartphone offerings have been confined to the likes of the Nokia (NYSE:NOK) 6970 and E71.
"We believe Straight Talk, which is owned by América Móvil, has negotiated a new data wholesale agreement with a major wireless carrier in order to offer these data hungry products," Piecyk wrote in a blog post. TracFone currently operates as an MVNO using Verizon Wireless (NYSE:VZ), AT&T Mobility (NYSE:T), and T-Mobile USA's networks. TracFone's Straight Talk brand is primarily sold through Walmart.
Piecyk wrote that Straight Talk's $45 unlimited plan for voice, texting and Web access compares favorably with more expensive plans from Boost, Leap and MetroPCS, which he said, along with T-Mobile, could all feel more pressure.
"When Straight Talk first entered the unlimited prepaid market, they had a pretty quick impact on the market even though it took time to roll out distribution," he wrote. "This time around the distribution is already in place and the brand is well known. It could be a tough Q4 for their competitors."
América Móvil's U.S. TracFone unit added close to 236,000 net subscribers in the second quarter, significantly lower than the first quarter and the year-ago period. The company blamed the slowdown in subscriber adds on higher churn.
- see this BTIG blog post (reg. req.)
- see this Straight Talk post
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