Sprint (NYSE: S) MVNO FreedomPop is launching its own branded tablets and soon a smartphone for under $100, hoping that the low-cost devices will help drive subscriber growth. The company is still going to support devices from branded OEMs such as Samsung Electronics, but is working with contract manufacturers on its own devices, which could help build its brand.
Starting today the company is shipping the FreedomPop Liberty, a 7-inch Android phablet with 4 GB of internal storage and Wi-Fi connectivity for a manufacturer's suggested retail price of $89. FreedomPop said the Liberty device is Wi-Fi-only to keep costs down, but noted that users looking to roam over the cellular network can bundle a FreedomPop hotspot with 500 MB of free data per month for a one-time cost of $49.
Within the next month the company will launch the FreedomPop Frenzy, a $99 7-inch, Android phablet with 4 GB of internal storage and both LTE and Wi-Fi connectivity. Then, within the next few months, the company plans to launch an $89 LTE Android smartphone. The company also plans to release the Samsung Galaxy Note 2 and Note 3 at prices that will retail for almost half of the current MSRP available today.
FreedomPop CEO Stephen Stokols said the company is working with contract manufacturers in China and India on its branded devices, though he declined to name them, adding that chip giant Qualcomm (NASDAQ:QCOM) provides them with reference designs to create lower-cost gadgets.
FreedomPop has built its business model around giving smartphone customers 500 MB of LTE data, 200 voice minutes and 500 texts per month for free. Beyond that, customers can pay $10 per GB of data or $20 per month for unlimited voice, texting and data.
Stokols recently said the company has hundreds of thousands of subscribers, and has said the company is on pace to hit 1 million subscribers by the end of 2015. In 2013, he said, the company generated just $9 million in revenue. So far this year, he said, revenue is running in the "many tens of millions" of dollars.
The new, low-cost devices are aimed at driving more growth, Stokols said in an interview with FierceWireless. "Broadly speaking, if you look in the U.S. market, unlike most international markets, there is very little focus on the sub-$100 smartphone or tablet market," he said. The company wants to get to a pace over the next few quarters where it adding 100,000 subscribers per month, Stokols added.
"We're trying to use low-end devices to fuel our own sub growth," he said. "That's really the focus."
Stokols added that the company has agreements with school districts, including one in Northern California, to buy the Wi-Fi-only Liberty tablet.
Stokols recently confirmed to FierceWireless that the company has been in formal M&A discussions with a publicly traded telecommunications company that is not a Tier 1 U.S. carrier. That offer is in addition to ongoing discussions on a deal with a major U.S. carrier. Stokols declined to name the telecommunications company that has approached FreedomPop, other than to say it is not one of the four Tier 1 wireless carriers--Verizon Wireless (NYSE: VZ), AT&T Mobility (NYSE: T), Sprint or T-Mobile US (NYSE:TMUS).
Stokols declined to provide an update on those M&A discussions.
In other FreedomPop news, Stokols said plans are moving forward related to FreedomPop's partnership with KPN's Belgian subsidiary BASE, which hopes to launch service in Belgium by year-end. That may slip into early 2015. FreedomPop has plans to expand beyond Belgium to the UK, Germany, France, Spain and the Pacific Rim via additional, unnamed carriers.
Stokols said the company had "formal conversations" ongoing with 12 foreign operators, whose business spans 30 countries (some operate in five or six countries, he said, and some operate in just one). Stokols said FreedomPop's service will be live in one international market and perhaps two by the end of the first quarter of 2015, and the company hopes to have several international contracts locked up by year-end.
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