John Stankey – wearing two hats as COO of AT&T and CEO of its WarnerMedia division – said he expects the coronavirus outbreak to impact supplies of handsets from China. That matters because the telco sees a wave of device upgrades when 5G service is rolled out later this year and anticipates a virtuous circle as cell phone upgrades and HBO Max uptake drive each other.
“There may be some shortages. Not significant. I think the vendors right now are fairly optimistic that it is contained and will be isolated to several weeks of delay,” he said at the Morgan Stanley Technology, Media & Telecom Conference in San Francisco.
There may also be a shortfall of watches and tablets, he noted. However, companies have stockpiled, he said, and he also cited encouraging news from Foxconn. The chairman of the major supplier to Apple in China said on conference call today that half of its workers are back and it expects its production capacity in the country to return to normal seasonal levels by the end of March.
Stankey reiterated that he sees the phone upgrades as a great way to market upcoming HBO Max, and visa versa. Higher value unlimited plans will include better wireless service and incentives around the streaming service, which debuts in May. He expects to “drive interest, offers and lots of cross-promotion as we start to get interest levels high with HBO Max.”
“Certain specials of iconic shows” (read Friends reunion) will help “marry the two.”
HBO Max just put its second controlled beta version with some new features related to customer profiles ad content downloads, he said. “They still need a little bit of work” – but the tech team has it covered. He believes the breadth of the offering on HBO Max will appeal to “everyone in the household.”
“There’s been a tremendous amount of work done. We were able to “take the best of what we do at each legacy Time Warner business and bring it forward in a consumer offering. There were many hard decisions that had to be made.”
Stankey also indicated, as he has in the past, that it makes sense for satellite broadcaster DirecTV to combine with smaller rival Dish Network. Dish CEO Charlie Ergen said on a recent earnings call he sees the two companies ending up together. But Stankey noted that getting regulatory approval for big media deals is “a little unpredictable.”
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