Samsung Set To Follow Apple With Cheap Smartphone Rental Plan, Carriers Set To Be Hit
In what could be a major blow to Australian carriers Samsung is looking take a leaf out of Apple’s book and lease smartphones direct to consumers.
According to some analysts the move that could see sales of a handset switch to mass retailers.
Insiders claim that Samsung is planning to launch a program for leasing its Galaxy phones in the U.S. market initially with a roll out to other markets including Australia in 2016.
The planned program is similar to the one Apple announced just weeks ago, according to an industry executive with knowledge of Samsung’s plans.
“It’s a no brainer why they wouldn’t do this,” the source said.
The move could impact Telstra, Optus and Vodafone who rely on subsidised handsets to drive revenue.
Apple announced its leasing plan – called the iPhone Upgrade Program – at its September innovation event, where it also revealed the iPhone 6s, 6s Plus, the iPad Pro and an updated Apple TV.
The upgrade program encourages consumers to buy iPhones directly from the Apple Store instead of going through their traditional carrier. Starting at US$32 a month, users sign a two-year financing agreement that allows them to get new iPhones every year along with Apple Care. Apple’s plan has been praised for providing better value to the consumer than anything sold by carriers in Australia.
Samsung executives in Australia have already been called in by carriers to explain the move and the potential impact on their revenues.
For years, smartphone hardware was subsidized by carriers such as Telstra and Optus who locked customers into two-year contracts.
Now, the carriers have been moving away from that, forcing many customers to buy their own hardware. The lack of subsidies threatens sales for high-end phones like the Apple’s iPhone and Samsung’s Galaxy series.
As a result, Apple announced its own program for making its pricey hardware more accessible to a wider swath of the population. Now, it looks like Samsung wants to make sure its devices are also within reach for consumers.
Samsung’s latest phones – Galaxy S6 Edge Plus and the Galaxy Note 5 – were announced in August. As iPhones sales have continued to soar, Galaxy smartphone sales have been disappointing for Samsung.