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Samsung looks to follow Apple with its own Galaxy leasing program

Matt Hamblen | Sept. 22, 2015
Threat to carriers is real, but not immediate.

Of course, Apple could eventually convert its Upgrade Program to online, with devices delivered direct to homes. But that prospect seems a ways off.

Tuong Nguyen, an analyst at Gartner, said Apple customers might be more savvy about wanting quick phone upgrades than Samsung customers. What could really change the ecosystem is whether Android phone makers like LG and Motorola jump on the leasing bandwagon. "If that happens, then carriers might be concerned, since phone makers would be taking a little bit of control away from operators," Nguyen said.

"Leasing programs are most attractive to those users that change devices often," added Jack Gold, an analyst at J. Gold Associates. "For Apple, that's a relatively high number, and perhaps not so much for Samsung."

Entner said it makes sense for phone makers to set up installment payment programs to be able to have more control over the replacement of older devices with new devices. "Apple can accelerate its replacement cycle, which was 21.7 months two years ago and is now 27.4 months, and getting closer to 30 months," he said.

The biggest affect of Apple's Upgrade Program will be on used phone sales, Nguyen said. "There's huge potential for second-hand sales with refurbished and gently-used devices turning over every year," he said.

Major U.S. carriers have mostly been quiet about the Apple announcement, and didn't respond to questions about Samsung's expected launch of a leasing plan.

"Carriers aren't really concerned about it yet," Entner said. "In the short-term, it doesn't make a difference. As long as distribution [by Apple and others] is limited, it will have no impact on their bond with the consumer."

Sprint CEO Marcelo Claure did note Apple's Upgrade Program at CTIA Super Mobility Week 2015, when he appeared onstage Sept. 10 and spoke on a wide range of topics.

Claure noted that Sprint introduced a leasing program a year ago, and was the first of the major carriers to do so. "It's great to see Apple copied it yesterday, and others carriers [have] basically copied it," he said, referring to Sprint's program.

 

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