Since the iPhone was first released seven years ago, the vast majority of American iPhone shoppers have purchased their device for around $200 with a two-year service contract. But this year, things could be much different.
An uptick in U.S. wireless customers using device financing plans has led to an increase in sales of the more expensive Apple iPhone 5s among customers who activated iPhones, according to a new report from Consumer Intelligence Research Partners.
AT&T's management thinks the carrier has enough runway with its wireless spectrum portfolio to last for the next two to three years, but the carrier fully intends to compete in upcoming spectrum auctions to augment its capacity, according to financial analysts.
Enrollment in smartphone upgrade plans among U.S. consumers has more than quadrupled since September 2013, going from 7 to 31 percent by the end of the first quarter of 2014, according to a new report from the NPD Group. The report is yet another data point indicating a major shift in how Americans pay for their cell phones.
AT&T Mobility forecasted sharply higher postpaid subscriber additions for the second quarter than it had in the year-ago period, and also said it expects more customers than ever before to buy smartphones via its Next handset upgrade program.
Verizon Wireless made changes to its Edge handset upgrade program that require customers to pay off 60 percent of a device's costs before upgrading, up from 50 percent before. The changes come as analysts are predicting that more devices will be financed in the U.S. in 2014 than previously expected.
Sprint wholesale partner nTelos Wireless felt that it needed to follow larger carriers by offering a device installment plan, but the company intends to make its offering compelling in terms of price and value, according to an nTelos executive.
Sprint wholesale partner nTelos Wireless plans to launch an equipment installment plan later this summer similar to offerings from larger carriers, but the financial and competitive impact of the launch is still not clear.
AT&T Mobility was not affected that much in the first quarter by T-Mobile US' offer to pay up to $650 in Early Termination Fees to customers who switched to T-Mobile, according to AT&T CFO John Stephens.
The shift away from the traditional U.S. model of a subsidized smartphone in exchange for a two-year contract appears to be accelerating and is likely going to continue to do so for the next few quarters. However, the shift might not be in the best interests of carriers, handset makers or consumers in the long run.