AT&T Inc.T recently unveiled its much-awaited cross-platform ‘NumberSync’ services with Samsung Gear S2. The service will allow users to make and receive calls, send text messages and receive other alerts on their Samsung smart watches and other wearable devices through the carrier’s 3G or 4G LTE network.
AT&T is offering the service with a Samsung Gear S2 under a two-year contract at $99.99. Although the service is limited to one device for now, the carrier has assured support for additional wearable devices in the coming days.
The Features
The service provides the option of virtually operating a phone number across multiple devices by linking them though the carrier’s IP Multimedia Subsystem (IMS) routers. This is a better alternative to the existing call forwarding system. Thus, in the event of a user losing his phone or being unable to access the same, he/she may respond to calls and other alerts through these wearable devices.
A Deeper Insight
While smartwatches and other ‘smart’ wearable devices are gaining traction in the market, their adoption rate is low. According to research firm eMarketer, the tech wearables category has, to date, failed to ignite sufficient interest in the market. While awareness of these devices has definitely gone up and the industry forecasts reasonable growth going ahead, purchase interest on the part of consumers is still low. This is because these devices still lag in terms of their utility value. However, with AT&T’s introduction of this innovative NumberSync service, people might actually have a reason to invest in these devices. AT&T’s offer should provide wearable device manufacturers like Apple Inc. and Samsung with better market opportunity. Moreover, the company, being a first mover in this category, will have the option to tie up with several manufacturers to sell its NumberSync service, earning service fees from customers as well as robust margins from its device partners. In addition, the service will complement and take further the revolutionary ‘Internet of Things’ (IoT) platform that makes way for seamless Internet connectivity between everyday technological devices.
The Bottom Line
As the telecom industry competes for a handful of customers in a maturing industry, AT&T constantly strives to create a niche for itself through innovation. However, it isn't the only carrier that is working on its network infrastructure to make such differentiated services possible. Rival wireless carriers like T-Mobile US Inc. TMUS have already set itself a target to better AT&T’s NumberSync service. We also foresee challenges from similar offerings by carriers like Verizon Communications Inc. VZ and Sprint Corp. S, going forward. Apart from the peer pressure that is bound to stay, the inherent question that irks us is whether the new technology will generate larger interest in these devices? We leave the answer to time, for now.
AT&T Inc. currently carries a Zacks Rank #2 (Buy).
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