What is meant by “Hardware as a Service”?
Hardware-as-a-Service (HaaS) is a completely managed solution similar to other service-based models, where customers don’t own the hardware but rather use them as long as they need them. We see examples of HaaS in every major city where pay-per-use rideshares, bicycles, and scooters reflect a “utility” rather than an “ownership” approach. You can also find a similar “utility” approach to streaming media—music and videos primarily—that differ from the past where consumers “owned” the media.
What’s the relationship between HaaS and telecom today?
For consumers, there’s one big difference for phones over transportation and media. And that’s because the equipment manufacturers have done a great job of building their brands and timing new phone introductions so that consumers have a more personal attachment to the device’s make & model than they might have with a grab-and-go bike.
HaaS reflects the reality that a consumers’ attachment to a particular phone lasts only as long as that device reflects their persona or keeps them up-to-date and connected to their world. For some, the attachment is broken with the latest blockbuster device release, such as when a new iPhone is launched. For others, it’s when the device doesn’t function well, meaning it can’t hold a charge, suffers from OS glitches, or experiences other problems. At the current prices for iconic devices such as Apple iPhones or Samsung Galaxy S phones, those “interruptions” typically happen well before the average consumer has fully paid for the device. As a result, consumers get caught between their desires and their financial reality.
Carriers continue to reduce subsidies as they pursue their strategic investments into content, 5G network buildout, and other business imperatives. However, they must also address the reality that the lowest priced promotion on the best new phone drives traffic and subscription. With more and more markets unbundling hardware from service and with ongoing increases in MSRP, elimination of subsidies, and lack of service innovations, consumers are getting caught in the middle between the OEM and the carriers.
In addition, in mature markets such as Western Europe, most carriers are in a zero-sum game in the fight for network activations via new subscribers. Every new subscriber comes from a competitor. And no carrier wants to be the one that loses. Therefore, carriers are turning to experience and service, as reflected in measures like Net Promoter Scores (NPS), to retain subscribers. The thrill of a new phone at a great price, when coupled with a seamless experience, certainly supports customer satisfaction.
In short, HaaS is a transformational product offering that addresses many concerns carriers face today such as increasing churn, decreasing ARPU, lower NPS, longer term device replacement cycles, and rising CapEx spending.
When it comes to HaaS, what’s Brightstar’s role?
HaaS aims to maximize the value of the smartphone while providing the best experience for the consumer to use the latest technology without worrying about the cost and risk of actually owning the device. Brightstar is creating an opportunity for more people to enjoy the thrill of using the latest new device, all with better control and no hidden costs.
With mobile phones, beyond the hype of the latest device, is the reality that many people and many markets can’t support the increasing price of mobile devices. This is creating an untapped market for pre-owned phones that carry the cache of a beloved brand even if the devices are a year or two old. Brightstar believes this market has been poorly served because of inefficiency and inconsistency in the supply chain of pre-owned devices. Brightstar and its carrier partners, however, can tap into the market by taking the latest phones returned from their first life as a HaaS service into the secondary market.
HaaS can create a seamless experience for consumers and Brightstar’s carrier customers because we’ll manage the process end-to-end: that involves establishing a finance company when required; taking care of funding requirements; developing go-to-market strategies; managing subscriptions; tracking performance; optimizing forward and reverse logistics; managing pre-owned devices and final disposition of the devices; and accelerating 5G adoption rates.
What’s the future hold for Brightstar and HaaS?
Brightstar is working towards designing HaaS to be more modular so it provides the required flexibility to suit its customers’ needs. The ultimate aspiration is to use HaaS to launch other devices such as smart watches and IoT accessories in some combination.
We certainly covered quite a bit here, but there’s still a lot to discuss with regard to HaaS. To learn more, be sure to visit Brightstar at 2019 Mobile World Congress in Barcelona. Come by our exclusive Pavilion (Hall 2, Booth 2120) between February 25 and 28.