BayStreet Research

January 12, 2023 - As innovations in smartphone hardware have slowed, advancements have shifted to unique experiences by integrating smartphones with smartwatches, headphones, and tablets. In postpaid, T-Mobile has typically had the most aggressive offers on connected tablets and smartwatches, consistently offering a free low-end Android tablet and the highest discounts on smartwatches. However, in 4Q22, Verizon succeeded with aggressive offers of a free tablet, smartwatch, or headphones with smartphone purchase. While AT&T has mostly remained on the sidelines, they will likely soon follow suit. While integrated devices do not offer the same ARPU as smartphones, they do reduce churn and increase customer satisfaction, with some estimates indicating as much as a ~30% reduction in subscriber churn with one integrated, carrier-connected device. With consumer and carrier alignment on the value device ecosystems, we believe carriers' promotions are likely to continue to shift toward bundles.