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Can TracFone Survive in the Android Market?


TracFone Wireless, Inc. has jumped on the Android bandwagon and they are offering several very attractive Android Smart Phones in a tank of sharks.

This is an interesting time because we are witnessing the largest prepaid cellular provider in the U.S. take the overdue leap from traditional cell phones to the ever growing market that is Android. What makes this move unique is that first, we are seeing the plunge unravel before us and secondly, the move is a bold one because they are entering a market where the biggest players are already well established.

Android smart phones can be obtained from any carrier at very competitive prices so TracFone, Straight Talk, NET10, and any other Virtual provider has to be able to BRING IT! They have to be able to offer good phones but more importantly, they have to be able to compete on a monthly plan basis. TracFone has many challenges to overcome including being able to continue their business model of offering affordability and letting customers stay in control.

The challenges are made even more difficult because the Android market is ever increasing in cost and competition. Androids are pumped out by manufacturers almost every couple months and the previous Android phone has something about it that will top the previous one. So with all the competition going against TracFone, it will be interesting to see how they hold up in this uncharted territory.

For those that doubt TracFone will come out on top, consider all the factors they have going for them and the great position this company is in to do amazing things with Android:

NO CONTRACTS

This alone should be enough to bring in customers from the competition in droves right? WRONG! Having no contracts is a great starting point but not all of the equation. It is about 70% of what you need but then you have to offer the latest phones (which is almost a direct contradiction to a big part of the prepaid audience). You see, if you offer a great value, most people will jump at the opportunity but there are those that might be willing to go into the contract just to have the latest phones and the latest technologies and that is where TracFone will run into problems.

You cannot offer a great value with the latest phones because of the initial startup cost and TracFone simply cannot absorb a chunk of that cost because there is no guarantee that after that cost is absorbed, the newly acquired customer is going to stick around long enough to turn a profit. So it is a great start to say: "Come to Tracfone, we have no contracts!"

Latest phones

Can TracFone offer the latest phones at the best prices and still turn a profit? That is a great question and only time will tell. Since Android is an open platform, this is another disadvantage to TracFone since historically, TracFone has made phones that only work with their services but what happens when you try to mix that idea with a platform that allows you to go anywhere, do anything, and removes that exclusivity from TracFone?

Assuming that they can offer the latest phones, NO CONTRACTS, and a great value, TracFone will not have to worry about customers buying the phone and using it with another provider right? WRONG!
Anything is possible, and unless they lock these phones, the risk will be there of taking any CDMA or GSM Android to another provider as an inexpensive upgrade. One solution might be to lock the serial number with a specific carrier and make this VERY CLEAR in order to prevent losses. The question is, can that be done?????

Improved Customer Service

What does this have to do with the Android cell phones you might ask? The answer is simple: In a market where you're selling the same product, you need something that will make you stand out from the rest. Have you ever talked to anyone in the customer service side of TracFone? If you haven't , then you're in luck. They are not the best but if you offer a dedicated service for Android users, TracFone just might have an upper hand on the competition.

Have you called T-Mobile or AT&T? They offer amazing service and that's probably why many people are willing to get into a ridiculous two year contract because they have someone to depend on that knows what they are talking about.

Summary

TracFone and Android should be together but this is a critical time that can make or break the company in this market. If they manage to offer great phones, great value, and great service, they could easily take over a huge piece of the pie but if they fail even in any one of these areas, TracFone could be in some trouble.

The good news is, they are at least working on offering the latest phones and also offering affordable ones. For example, the latest offering from Straight Talk is an impressive Dual Core LG 2X which is the same as the LG G2X from T-Mobile and a CDMA version called LG Optimus Black. Both these phones tell us that TracFone understands their audience and they are making an attempt to break into Android. Let's sit back and whatch the largest prepaid cell phone provider take on this new territory.

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