Vodafone challenges EE for UK low-cost LTE smartphone crown

Vodafone piled pressure on UK rival EE with the launch of an own-brand LTE smartphone that undercuts the cheapest comparable device EE offers by around €25 ($34).

Retail prices for the Vodafone Smart 4 Turbo, which was unveiled Monday, start at €99 compared to £99.99 (€125/$171) for EE's Kestrel smartphone, which it launched in March. Both devices have similar specifications, with the Android operating system, 4.5-inch touch screens and 1.2 GHz quad-core processors.

When EE unveiled the Kestrel, it billed the smartphone as "the UK's lowest standard priced 4G smartphone."

Vodafone simultaneously unveiled the Smart 4 Power, which sports a 1.3 GHz quad core processor and larger (5-inch) touch screen than the Turbo. The starting price for the Power is €169.

Patrick Chomet, Vodafone group terminals director, said the two smartphones offer "the best 4G experience at a budget price."

Vodafone is playing catch up to EE in the UK LTE market after the latter was allowed to begin offering services on refarmed 1800 MHz spectrum in October 2012, some 10 months before its rivals.

The operators are launching own-brand LTE smartphones at a time when analysts predict a slowdown in UK smartphone and tablet sales.

CCS Insight forecasts smartphone and tablet sales will fall by 5 million units year-on-year in 2014, following a 20 per cent annual drop in smartphone sales in the opening months of 2014, and a 17 per cent fall in tablet sales.

The company pointed to a drop in replacement smartphone sales as part of the reason for the decline, noting that a slowdown in the pace of innovation in smartphone development is giving consumers fewer reasons to upgrade than in the past.

Ben Wood, chief of research at CCS Insight, said device manufacturers are already getting creative to overcome the slump, by offering free tablet PCs with smartphones to boost sales.

"No one anticipated we'd see so much pressure on both tablet and smartphone sales at the same time. In response to slowing sales consumer electronics companies will be tempted to step up their marketing efforts and spoil buyers with a wealth of attractive promotions and bundles," Wood said.

For more:
- see Vodafone's press release
- see EE's Kestrel announcement
- read CCS Insight's sales forecast

Related Articles:
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EE set to launch 'cheapest' UK LTE smartphone in April
EE says on track to exceed 6M LTE users in 2014

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