Verizon launches $99.99 Smart Locator, a tracking device with Bluetooth, GPS, WPS, and LTE, with one year of free service and $3/month thereafter
Chris Welch / The Verge :
Context & Ripple Effects
Verizon is entering a category Samsung mapped out first: last September's SmartThings tracker paired a $99 LTE tag with AT&T connectivity at $5/month after year one. The Smart Locator matches the hardware price almost exactly but undercuts the ongoing fee at $3/month, making the subscription — not the device — the competitive lever.
The move also fits Verizon's recent playbook of layering small recurring services onto its subscriber base, from the free tier it added to its $3/month Call Filter service to the Tech Pack gadget-subscription trial. After the Wear24 smartwatch showed the limits of selling expensive standalone LTE hardware, a cheap tracker with a thin monthly fee is a lower-risk way to put more billable devices on the network.
First-order effects
- Samsung's SmartThings tracker now competes against a functionally similar device whose service costs $2/month less after the first year, pressuring its AT&T-bundled pricing.
- Verizon gains a new low-cost attach product that adds a steady $3/month line per unit sold on top of phone plans.
Second-order effects
- Carriers get a template for monetizing spare LTE capacity with inexpensive companion devices, inviting AT&T and others to counter with their own tracker-and-subscription bundles.
- Accessory makers without carrier distribution face a pricing floor problem: a $99 device with subsidized connectivity is hard to beat on total cost of ownership.
Third-order effects
- If the pattern holds, the carrier business extends from selling phone lines to renting network access to everyday objects, turning each tracked item into a recurring-revenue endpoint.
- Pricing power shifts further toward whoever owns the connectivity layer, pushing independent tracker vendors toward carrier partnerships or Wi-Fi/Bluetooth-only designs that avoid cellular fees.
The trend: Wireless carriers are converting one-time gadget sales into recurring monthly subscriptions by attaching cheap LTE devices to their networks.