Does Facebook Want In to China? | Tech Teardown - 3/7/14 | The Motley Fool | Summary and Q&A

TL;DR

Leap Wireless, soon to be acquired by AT&T, is losing customers due to aggressive competition from T-Mobile.

Key Insights

• 😀 Leap Wireless is facing customer losses due to competition from T-Mobile, which has expanded through mergers and network expansion.
• 🙈 AT&T's acquisition of Leap Wireless is seen as a necessary move to rescue the struggling company.
• 👤 Facebook is looking to expand into China and has shown interest in providing a good user experience for Chinese users by hiring someone who specializes in simplified Chinese.
• 🤱 The news feed redesign is an important product change for Facebook as it is where users spend most of their time.
• 🫠 Twitter has been experiencing declining ad prices, while Facebook has seen an increase in ad prices due to strong engagement and mobile growth.
• 🫠 BlackBerry's BBM messaging service is transitioning to an ad-supported model to monetize the service, but faces intense competition in the messaging market.
• 😘 Microsoft's reduced licensing fee for low-cost devices is an attempt to compete with Google's dominance in the operating system market.

Transcript

Aaron Kennedy here today with Evan new we're doing Tech tear down for Friday March 7th late last year Telecom giant AT&T said it would acquire leap Wireless for $1.2 billion in cash this comes years after AT&T's Infamous failed attempt to buy T-Mobile it now seems that T-Mobile is eating uh leap Wireless's lunch what's happening looks like they are... Read More

Questions & Answers

Q: Why is Leap Wireless losing customers?

Leap Wireless is facing aggressive competition from T-Mobile, as well as challenges in keeping up with T-Mobile's network expansion. They have also attributed their customer losses to the merger between T-Mobile and Metro PCS.

Q: What is AT&T getting out of the acquisition?

AT&T is primarily focused on acquiring spectrum and strengthening their prepaid brand. They are also aiming to target the growing prepaid market as the subsidy model shifts.

Q: How does Facebook plan to expand into China?

Facebook is looking for someone who specializes in simplified Chinese, indicating their interest in providing a good user experience for Chinese users. They have been evaluating the possibility of making Facebook available in China for some time.

Q: What is the significance of the new news feed design for Facebook?

The news feed redesign is a significant move for Facebook as it is their core product. They have focused on streamlining and making it more engaging, taking cues from their mobile apps.

Summary & Key Takeaways

• Leap Wireless reported a loss of 92,000 net subscribers and 745,000 for the full year, attributing the losses to competition from T-Mobile.

• The aggressive competition and T-Mobile's merger with Metro PCS has led to Leap's struggle to keep up, resulting in a lack of ability to scale their customer base.

• AT&T's acquisition of Leap Wireless is seen as a necessary move for Leap investors due to their current financial situation.