By Lisa Johnston
New products on display at the American International Toy Fair, held in N
Chicago – Consumers who sign up for carriers’ phone-financing programs, particularly those with early trade-in/upgrade options, are financing smartphones with lower resale values, Consumer Intelligence Research Partners (CIRP) concluded.
Consumers who finance phones therefore favor Android-OS phones and Samsung phones over iPhones, which have higher resale values, the research company said
CIRP based its conclusions on a survey of consumers who activated a new phone during the July through December 2013 period. The period coincides roughly with the launch of the AT&T Next, Verizon Edge and Sprint One-Up plans, and T-Mobile’s addition of the Jump plan, CIRP said.
Phone financing “appears to have steered customers to Android and Samsung phones, which historically have had a lower value in the secondary market than Apple iPhones,” said CIRP co-founder Josh Lowitz. “To the extent that consumers consider resale value when they buy new phones, they will lease lower residual-value phones and buy more valuable ones.”
Android phones accounted for 51 percent of overall U.S. smartphone activations during the survey period but accounted for 61 percent of financed phones, CIRP said. T-Mobile helped boost Android’s share of financed phones because 72 percent of T-Mobile activations were Android phones and T-Mobile does not offer subsidized phones with service contracts.
Among phone brands, Samsung accounted for a 31 percent share of overall U. S. smartphone activations but accounted for 49 percent of financed phones during the survey period. Here again, T-Mobile helped boost Samsung’s share of financed phones because 56 percent of smartphones activated on the T-Mobile network are Samsung models, CIRP said.
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