Shortly after Apple launched its iPhone Upgrade Program, Forbes reports that Samsung is planning to launch a similar finance plan for its Galaxy smartphones.
Samsung may be launching this leasing program in the next several months, although that timeline may accelerate, the executive said.
Carriers have been moving away from so-called subsidized contracts, where the cost of a new smartphone is hidden in the monthly service plan fee and the cost of a new device appeared to be anything from free to $200. With true purchase costs now much more visible, manufacturers have a strong incentive to offer attractive financing in order to encourage regular upgrades.
Samsung, though, has a stronger motivation than Apple. While Apple has been enjoying record iPhone sales, Samsung has been struggling to compete with both Apple and Chinese Android handsets – its smartphone business seeing a 37.5% drop in operating income in Q2 and the company reportedly planning to lay off 10% of its workforce.
While the terms of Samsung’s financing are not known, it’s likely the company will adopt a similar approach to Apple, where you pay off the cost of the phone over two years but can upgrade to a new model every year. Apple’s plans start at $32/month.
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As we all expected.
I don’t get it; what the incentive for a Samsung Phone user to upgrade to a Samsung Phone¿
An Android software update?
Why not? They copied everything else so far.
Just in their nature! I’m sure if Apple released a thumb drive with a bad sector, Samsung would want to copy it and release it too.
which is the copy of T-Mobile JUMP on its own
This nonsense is exactly how you incite unnecessary hate and perpetuate outdated rivalries.
2012 – Carriers introduce upgrade programs in order to kill contract structure
2015 – Apple introduces upgrade program in order to sell more phones
2015 – Samsung introduces upgrade program in order to sell more phones
And the conclusion of that timeline is… “Samsung to copy Apple Upgrade Program”?
Seriously. Why create controversy when there is none. This isn’t a new idea created by Apple, its simply the direction of the industry.
Manufacturer programs are new.
You are right! But the first step was done by Apple in 2007 when it introduced the iPhone under its own control, so that the telcos began to loose control of customer and services, and the ‘phone’ became an app of a portable computer.
This is the ‘next step’ (very pun intended!) that Steve saw long ago.
Then —by means of FaceTime and iMessages— telcos becomes tubes…
As others have pointed out, such programs are not new. Carriers have been doing this for some time. However, it is new for phone OEMs to do this. In doing so, it’s another step in taking the customer relationship away from the carrier and moving it to their OEM of choice. The carrier more and more just becomes the “dumb pipe” in the equation.
This was a good move by Apple and it only makes sense for Samsung (and others) to follow. People are just having a little fun at Samsung’s expense because Samsung is just shameless about “copying” everything from Apple.. from their products, their advertising, the product packaging and even programs like this. As they say, imitation is the sincerest form of flattery. While such leasing programs are not original and something one follows more than copies, one does have to ask why Samsung didn’t do this before Apple did if such a move were so obvious.
It makes sense for Apple to let users upgrade every year because after 12 months, the customer will have paid off half of the purchase price, but due to the relatively low depreciation on iPhones, that traded in iPhone will be worth more than half of the original purchase price, so if Apple sell that iPhone for more than 50% of it’s original price, it will offset the loss of interest on the money provided to purchase that iPhone..
How is this likely to work out for Samsung with the more rapid depreciation rates that Android phones suffer? If a user does upgrade after 12 months, the customer will also have paid back half of the purchase price, but will trade in an Android phone that would be unlikely to fetch half of what was originally paid for it and the company financing the original phone will also have to cover loss of interest too if they offer a similar deal to Apple’s. Who will cover that loss? If Samsung do it will lower their profit margins, but will only have gained that additional sale by effectively subsidising that sale. Does it really make sense to do that when the company is already losing profitability?
Really out of character for Samsung to take something Apple provides and then just copy it.
LOL! You forgot the sarcasm tag.. /s