Samsung inspired by Apple Purchase Plan

Samsung is planning to bring out their take on the iPhone Upgrade Plan. Jack Wallen believes this heralds a major shift in the mobile landscape and will wind up a win for the consumer.

Image: Jack Wallen

No matter how you feel about their products, if there's one almost universal truth in mobility, it's that Apple knows business...knows it quite well. Facing what looked like could be an Android singularity in the world of mobile devices, back in September, 2015, the Cupertino company introduced a carrier-free upgrade program, dubbed the iPhone Upgrade Program. With this program, consumers could pay for their iPhones through Apple (as opposed to their carriers) in installments (as low as $32.41/month USD).

Since then, iPhone sales have skyrocketed. While Apple has witnessed a major uptick in sales, Samsung has watched its numbers tumble. That is precisely why the Korean tech juggernaut is planning their own purchase plan. The details of Samsung's plan have yet to be released, but you can be sure it will look similar to that of Apple's...consumers will be able to purchase Samsung devices, directly from the company, in installments.

This comes on the heels of nearly all carriers dropping their subsidized contracts (where the cost of new devices is actually hidden in monthly fees), as well as the massive growth of low-cost, unlocked Android devices. It is that latter issue, I believe, which has many of the bigger Android manufacturers concerned. When the likes of OnePlus can crank out near-flagship devices and sell them at low-end prices, Samsung, HTC, LG, and Lenovo will take notice. And now, with iPhone sales increasing (thanks to the Upgrade Program), things are about to change.

And change they will.

Win for the consumer

It would not surprise me to see every major manufacturer hopping onto the good ship upgrade sometime before 2016 is over. That, my friends, would be a big win for consumers. How? Because in the world of mobility, consumers have been gouged and locked in by carriers for years. You wanted a specific device, you most likely would have to switch to a different carrier...which, of course, would either cost you in terms of dollars or time. But this move (this mimic of Apple) by Samsung should be a warning to carriers of things to come. What things? That the mobility landscape is drastically changing and the power will soon be totally in the hands of the consumer.

That sounds kinda nice doesn't it?

All because Apple saw slumping sales and decided to sell their products directly...and Samsung saw the new program succeed and opted to follow in their footsteps. Now? We win. Thank you, Apple. Thank you, Samsung.

The caveat

There is, of course, a caveat to these programs. If you do that math, you can see there is zero cost savings for the consumer. After the requisite twenty four months of payments (on a 16 Gb iPhone 6S), you will have paid $777.84 USD. If you want a 128 Gb iPhone 6S+, that payoff is $1077.84 USD.

Make sure you take those numbers in for a moment...remembering, all the while, you're still paying your carrier monthly fees. All of a sudden, that payment plan doesn't sound so wonderful...especially considering you can opt for an unlocked Android device for around $200-$300.00 USD.

Even so, to many consumers cutting the carrier ties is worth it. This means Samsung needs to roll this upgrade plan on sooner rather than later. And while they're busy creating this plan, they need to make sure their model allows for users to upgrade...even before they've reached that blessed payoff. That means: Two year payoff, one year upgrade. But let's consider this option:

  • 2 Year payoff
  • 1 Year upgrade
  • 1 Year trade-in

In that 1 Year trade-in, users can (should their original devices be in good shape) get a portion of their payoff deducted. How would that be fair to Samsung? In many cases, those trade-ins can be refurbished and sold to second-tier carriers. Everyone wins.

I strongly believe that, in the future, the carrier is going to be responsible for two things: Voice and data. That is as it should be. Allow the consumer to purchase the device they want, from the OEM they want, and use them on the carrier they want.

Viva la upgrade!

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