Failure to Launch: LEAP Wireless and the iPad

According to the New York Times and the Wall Street Journal, LEAP Wireless is looking for a suitor. LEAP, which most of us know as Cricket, services the prepaid marketplace, which has become crowded as AT&T, Sprint (News - Alert), and Verizon have all expanded their services in the marketplace.

 

In retrospect, the offer from MetroPCS was not only fair, but probably better than what they can expect going forward.

 

It maybe the size of the market for low-end prepaid has been over estimated, or more specifically it may require an aggregation for the price point that few can manage.

 

Sprint has been more aggressive in this space with its Boost and Virgin Mobile (News - Alert) brands, plus their own low price point, and what may be the more telling story is how this consolidation is happening as the smartphone market expands. Clearwire (News - Alert), majority-owned by Sprint, is also looking to be more aggressive this year with the alliance of the cable operators.

 

The prepaid wireless market is not only crowded, it’s diverse.

 

Former Virgin Mobile leader Amol Sarva (News - Alert) gave us the Peek, which is a great e-mail and text device. In my observation, the next generation only uses voice to call their parents after they threaten to stop paying the bill for the phone.

 

The real story may be in the types of traffic being served. SMS, IM, Web browsing and even entertainment video does not require a symmetrical pathway, and with IP, you can rely on buffering to solve a lot of ills.

 

I expect that the iPad customers will be happier with AT&T than the iPhone customers because of this. Of course the price point of $14.95 is good, but there is no clear path to for the iPad to be a communication device. Amazon had the courtesy of embedding the cost of the network into the Kindle (using Sprint’s network).

 

Apple has embedded you home network and the use of 3G is a premium you pay extra for. It will be interesting to see what kind of double dip its negotiated with AT&T. The lack of a USB interface means that Verizon may only be able to get to this device with their LTE implementations using Micro SIM Chips.

 

But being in a price war does not answer the question what do people want.

 

I think the iPhone sales will suffer from the addition of the iPad. I watched the iPad launch and came away thinking that my TV was a goner. Mind you I am not a big screen fan, but the ability to have a device in our laps could mean the end to further conversations in my family. (I think ear buds were the big winner). However, that begs the question even more of how do you break through to have a conversation.

 

While many in the communications industry are upset with Apple for making such a one way device, I would caution that the company did not make it for us.

 

And when it comes to prepaid solutions, the market is getting pretty thin on price distinctions. Do people distinguish between embedded pricing and monthly fees enough for the total cost of ownership to be a consumer based question?

 

It may be the wireless world is ultimately filled with a variety of devices that will have little to do with voice quality and everything to do, with consumer marketing. If that is the case the choice literally will be in the hands of the consumer.