Limited smartphone stocks dampening early holiday season, Wave7 reports

Google's Pixel

Limited supplies of high-end smartphones with oversized screens are constraining sales in the U.S. as the market enters the all-important holiday season, Wave7 Research noted.

Samsung’s disastrous endeavor with the Galaxy Note 7 has dampened expectations during a typically active fourth quarter, and limited stocks of both Apple’s iPhone 7 Plus and Google’s Pixel XL are also shackling the market. And while Google’s new phone works on the networks of every major U.S. carrier, Verizon has “exclusive” rights to the handset, further limiting its appeal.

“One month into 4Q 2016, postpaid competition is mostly marked by the quiet between the storms of September (the iPhone 7 launch and the Note 7 recalls) and the sales of Black Friday,” Wave7 wrote in a note to subscribers. “Heavy marketing of the Pixel and major offers on it from Verizon and T-Mobile – and a minor one from AT&T – are the exceptions to this rule.”

Verizon continues to try to differentiate itself from its competitors through its smartphone portfolio, Wave7 observed, but that effort is hampered by “severely poor” supplies of the 128 GB Pixel and Pixel XL. The nation’s largest mobile network operator is offering buy-one, get-one-free promotions on a handful of Android phones, but it continues to bet heavily on Google’s new high-end device.

“With Verizon losing postpaid voice customers in 3Q 2016, the challengers seem to smell blood,” Wave7 wrote. “Verizon is fighting back with its Jamie Foxx impostors in magenta and yellow ties, but then again, Verizon has shifted most of its ad dollars to priority #1, the Pixel.”

That bet looks to be paying off, as customers appear to be embracing the Pixel in the wake of the Galaxy Note 7 debacle.

“Sources are pointing to a slowdown in activity; a lull between the iPhone 7 launch (and Note 7 recovery) and Black Friday,” Wave7 reported. “However, the Pixel is anything but quiet. Checks point to a strong launch and this appears to be a winner for Verizon and for the larger move toward the unlocked sales model.”