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​Comcast’s Q3 highlights how to navigate customer shifts, end of the cable

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Comcast’s third quarter results were better than expected and the familiar storyline revolves around how customers are cutting the cord. That storyline is legit, but Comcast’s broadband business is booming and its move to embrace and integrate over-the-top services with its X1 platform appears to be paying off.

At a high level, Comcast reported third quarter earnings of $2.88 billion, or 62 cents a share, on revenue of $22.13 billion, up 5 percent from a year ago. Non-GAAP earnings for the third quarter were 65 cents a share. Wall Street was looking for earnings of 61 cents a share on revenue of $21.82 billion.

In addition, Comcast saw its business services unit continue to deliver strong growth with third quarter revenue of $1.8 billion, up 10.6 percent from a year ago. But the notable surge in the third quarter, came from Comcast’s high-speed Internet business as revenue jumped 9.6 percent.

Comcast’s digital transformation journey:

Comcast added 363,000 high-speed Internet customers in the quarter to more than offset 106,000 video customer net losses. A 35,000 net loss in voice customers was offset by 42,000 customer additions for security and automation.

If you break those customer relationships down, it’s clear that Comcast is losing the bundle, but retaining single product customers. Add it up and Comcast is navigating shifts in its customer base as well as any company.

On a conference call with analysts, Comcast CEO Brian Roberts said:

Customer relationship net adds of 288,000 were driven by 363,000 net new Broadband customers, the best third quarter in 10 years. Collectively, residential Broadband and business services revenue increased by nearly 10%.

Roberts added that the move to look at its broadband holistically as a product–rebranded xFi–adding new features like parental controls and hooks into the smart home have paid off. “By aggregating and integrating everything from linear TV, to applications like Netflix, YouTube and soon, Amazon Prime Video, X1 delivers an unmatched user experience and the broadest range of content that underscores the value of our broadband service,” said Roberts.

comcast-customer-relationships-q3.png

The other thread worth noting is that Comcast’s ability to keep single product customers enables it to cross-sell another bundle in the future. For instance, Comcast’s wireless business just past more than 1 million customer lines. Perhaps the broadband and mobile bundle is the new cable-ish package for customers.

Comcast certainly has its challenges ahead. For instance, 5G will create a new set of broadband competitors. In addition, Comcast still has to get its networking blocking and tackling down. A series of outages for business customers spurred a same old Comcast refrain. But it’s hard to count Comcast out given the way it has navigated things so far.

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Hey Toyota, where’s the new Tundra BEV?

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It’s not unfair to say we’ve been waiting for quite some time for the new 2022 Toyota Tundra. The full-sized pickup may have become a familiar sight on US roads since it first launched in 2000, but with the second-generation truck debuting all the way back in 2007 it’s a reasonable observation that Toyota’s upgrade cycle hasn’t exactly been rapid.

That sales had been so strong up even as the Tundra aged – comfortably above 100k per year in the US for the past eight years – was a reminder that, even if the Ford F-150 gets more attention, Toyota’s pickup still had plenty of fans. They’ve been waiting eagerly to see what the 2022 Tundra would bring in its third generation.

The answer is a brash new design with a grille that’s already proving to be controversial. A new cabin that’s first to introduce Toyota’s brand new – and much-needed – infotainment system. And a twin-turbocharged V6 gas engine that will be offered as an i-FORCE MAX hybrid.

In short, a mixture of the familiar and the new. That could be a problem, not least when it comes to what’s under the hood.

On paper, the i-FORCE MAX V6 is a competitive drivetrain. Toyota combines the twin-turbo gas engine – that in the standard Tundra is good for 389 horsepower and 479 lb-ft of torque – with a clutch-driven motor-generator, sandwiched in-between it and the 10-speed automatic transmission. A 288V nickel-metal hydride battery pack provides the juice, and the result is a total of 437 horsepower and 583 lb-ft of torque.

Toyota is, clearly, no stranger to hybrids. Its efforts with the Prius helped push gas-electric into the mainstream, and it has been steadily adding the drivetrain tech to the rest of its range since. The latest Toyota Sienna minivan, for example, is only available as a hybrid now.

Five years ago, then, the Tundra Hybrid would’ve legitimately been a big deal. At this point, however, it’s tough to give Toyota too much credit here, given how the rest of the pickup segment has been moving. What might once have been considered a fairly conservative category has evolved into one of the most ambitious.

Ford, for example, already has a hybrid version of the F-150 on the market. Its 3.5-liter PowerBoost V6 manages 430 hp and 570 lb-ft of torque – in the same ballpark, then, as the Tundra’s – but Ford also uses it to help turn the truck into a mobile generator. With the Pro Power Onboard option, you get up to 7.2 kW of power in the bed to run worksite equipment, a campsite, or even key home appliances during power outages.

Toyota’s big bed tech boast, meanwhile, is a button on the key fob to open the tailgate.

More pressing, though, is the absence of any talk of full electrification for the Tundra. There it’s instantly playing catch-up with rivals: Ford has the F-150 Lightning on track for a launch in fall 2022, for example. Over 150,000 people have already put down reservations for the all-electric pickup, which promises up to around 300 miles of range on a charge.

Chevrolet and Ram are working on their own pickup EVs, with special battery-electric versions of the Silverado and 1500 respectively. Rivian’s R1T may be a less familiar name, but the startup hasn’t been short on hype as it begins deliveries of the quad-motor truck. Tesla’s Cybertruck and plenty of others are working their way to market too, taking advantage of an apparent awakening among pickup buyers to the potential advantages of EVs.

Toyota may well have a Tundra BEV on the roadmap too. Problem is, the automaker isn’t talking about it publicly yet, and while playing your cards close to your chest is good advice in poker, right now it means it’s hard to take the truck seriously at a time of great upheaval in work transportation. That’s doubly the case when, like Toyota, you don’t exactly have the strongest reputation for embracing BEVs in the first place.

There is, at least, a fully-electric Toyota platform coming. e-TNGA will underpin a range of vehicles from the company, including a new SUV. Toyota has also promised two BEVs for North America this year, though hasn’t said exactly what form they’ll take.

In short, though the 2022 Tundra may feel reasonably competitive right now, there’s every chance that the situation will change in relatively short order. Toyota, like Honda, may be reluctant to over-promise and then run the risk of under-delivering, but by remaining coy on EVs it’s doing nothing to upend perceptions that it lacks momentum in the transition to electrification.

There’s a lot to like about the new Tundra. If this third-generation version is to deliver the same longevity as its predecessor, however, Toyota could start with doing a better job at pitching it for the future. After all, the days of a truck being judged solely on torque, payload, and towing power are behind us.

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Honda’s 2024 Prologue EV targets are difficult to believe

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Honda is setting aggressive sales goals for its upcoming all-electric Prologue SUV, though limited availability and concerns around EV subsidies could hamper those ambitions. A collaboration with GM, the Honda Prologue will be based on the Ultium battery-electric platform, though isn’t expected to go on sale until 2024.

Honda has been fairly miserly with details about the SUV, though the general promise is a distinctly Honda-esque vehicle that distinguishes itself from GM models based on the EV platform. An Acura version will follow shortly after that. Beyond Prologue, meanwhile, the automaker plans more EVs using its own e-Architecture platform.

That’s still in development, but Honda needs to get it right. The automaker is aiming for 70,000 annual sales of the Prologue when it arrives in 2024; by 2030, though, it’s anticipating BEV sales of 500,000 each year. Come 2040, Honda insists, it should only be selling electric vehicles. That’s a huge jump from where Honda is today, without a single all-electric model on sale in the US.

Demand for electrified vehicles, Honda insists, has been solid. Vehicles like the CR-V Hybrid and Accord Hybrid have helped make the first half of 2021 its best so far for electrified models, the automaker claims.

Still, it’s fair to say that Honda’s electric transition hasn’t been a straightforward one. Expectations were high for the Clarity series, a broad range of electrified vehicles that included pure-electric, plug-in hybrid, and hydrogen fuel cell models. All have since been discontinued, however, with questions in each case about the market competitiveness of each model.

In contrast, Honda has pushed ahead with regular hybrids: vehicles that combine combustion engines with battery-electric drive that is charged via excess ICE engine power or when the vehicle is braking. These can have a positive impact on fuel economy – the 2022 Insight, for example, is rated for up to 55 mpg in the city – but are far from zero-emissions.

Honda’s argument is that such hybrids offer drivers a reassuring taste of electrification. “We know customers who have a good experience with a hybrid vehicle are more likely to buy a battery electric vehicle in the future,” Dave Gardner, executive vice president of National Operations at American Honda Motor Co., Inc, points out. “Our strategy is focused on introducing a higher percentage of hybrids in core models in the near term, making a committed effort to achieve higher volume leading to the introduction of our Honda Prologue.”

The 2024 Prologue, though, won’t be a golden bullet to Honda’s EV problem. For a start, it’s going to be limited in availability, at least to begin with: just California and the ZEV states. The automaker argues that those regions would comprise the bulk of sales anyway, and that a broader release will follow later on.

Honda’s stance that the buying public needs that sort of convincing is at odds with many of its rivals. GM itself has been pushing ahead with Ultium, with the Cadillac Lyriq already opening for reservations, the GMC Hummer EV over-subscribed, and the promise of a Chevrolet Silverado EV in the relatively near future. Ford, meanwhile, has been even more aggressive, with the Mustang Mach-E proving a hit in the electric crossover segment, and the F-150 Lightning bringing an all-EV version of the best-selling pickup to market in spring 2022.

Even Honda management has conceded that its roadmap may not be as forceful as is required. The European Green Deal, revealed in July, paves the way for zero-emissions-only sales of vehicles in the EU by 2035; that’s five years ahead of the transition on Honda’s all-electric timeline. In the US, it also sees worrying implications around the proposed changes for EV subsidies.

Where the current federal incentive for electric vehicles promises up to $7,500, new proposals could increase that to as much as $12,500. However, in order to qualify for the full amount, automakers would need to not only produce their EVs in the US, but in unionized factories. Honda ticks the first of those boxes, but not the second.

“As with other automakers, Honda’s initial zero emission vehicle sales goals of 40 percent by 2030 are contingent upon fair and equitable access to state and federal EV incentives intended to encourage American consumers to purchase electric vehicles,” the automaker said today. “Honda has urged Congress to ensure that all vehicles made in America are treated equally.”

Tesla – which also operates US factories, but without a union workforce – has also been critical about the possible update to the incentives system. Final changes for the US EV tax credits have not been confirmed at this point.

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Tesla kills Referral program on all vehicles

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Tesla has announced that as of September 18, 2021, the referral program for all of its electric vehicles and solar panels has ended. Previously, the Referral program was a sales tool that Tesla used that gave those who referred buyers for Tesla vehicles or solar panels credits good for free Supercharging miles and opportunities to win an electric vehicle. The Referral program would also award users between $100 and $500 while giving those who referred buyers for solar products the opportunity to get Powerwall energy storage systems.

The elimination of the Referral program is happening globally, and the only product that is still eligible for the program is the Tesla Solar Roof. The referral award for that product is $500. For the Solar Roof, Tesla says that friends and family who order the product via the Referral link can earn $500 when they gain permission to operate.

The person who referred the Solar Roof buyer will receive $500 per referral. Tesla’s Referral program was a key sales tool to generate demand and sell its cars and other products because it relies on word-of-mouth. However, it is easy to imagine that it no longer needs the referral program to generate sales with the popularity of Tesla vehicles.

According to reports, some popular influencers were able to earn millions of miles of free Supercharging from the Referral program. Currently, Tesla is struggling to meet the demand for many of its vehicles, like many automakers. Interestingly, the message received by Referral program members indicates that the program has ended “until further notice.”

The “until further notice” statement seems to indicate there’s a chance the program could return in the future. Perhaps the program will return when Tesla has a new vehicle model it wants to promote. Reports have indicated that Tesla has its eyes on producing a smaller electric vehicle that could sell in the $25,000 range.

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