New mobile research shows new handsets and no-contract options are helping to drive upgrades
Parks Associates mobile research finds just 25% of T-Mobile subscribers prefer the traditional mobile contract model of a two-year contract with a subsidized handset. The research firm’s Choice of Mobile Device: The Consumer Perspective finds T-Mobile subscribers have embraced the company’s new programs that do not require a service contract. Among T-Mobile subscribers planning to purchase a smartphone, 33% prefer to pay full price upfront, and 31% prefer to pay in monthly installments.
“T-Mobile and AT&T have also tapped into the consumer desire for the latest and greatest smartphone with their early-upgrade programs,” said Harry Wang, Director, Health & Mobile Product Research, Parks Associates. “Fourteen percent of smartphone owners plan to upgrade their phone more quickly the next time, and 27% of these consumers cite special operator incentives as the reason for their quicker upgrade.”
These alternative plans, early upgrade and no-contract plans, are disrupting the market’s traditional purchase model for handsets. Parks Associates’ Q3 2014 consumer research of U.S. broadband households shows slightly more than 50% of U.S. consumers who are planning to purchase a smartphone in the next 12 months, regardless of brand, would prefer an alternative to the two-year contract model.
“Accelerated rollout of LTE services by operators worldwide, along with the launch of flagship smartphones like Apple’s iPhone 6 and Samsung’s Galaxy Note Edge in 2014, have transformed the mobile industry,” said Wang.
OEMs will showcase their top-tier smartphone models and smart watch products at the upcoming Mobile World Congress. Wang noted that operators must find effective ways to persuade smartphone users to upgrade early and purchase a bigger data pool while, at the same time, minimize voluntary customer churn.
“These alternative plans are one stone for two birds—they help operators acquire new subscribers and retain loyal, high-value customers,” Wang said.
Choice of Mobile Device: The Consumer Perspective analyzes the impact of new handset purchasing models on the market for mobile phones. For more information on Parks Associates’ mobile research, visit www.parksassociates.com or call 972-490-1113. To schedule an interview with Harry Wang or request mobile data, contact Holly Sprague at hsprague@gmail.com, 720.987.6614.
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