Indications from a range of sources are that, at least initially, sales of the new Samsung Galaxy S9 are either at or below comparable sales of the vendor’s flagship GS8 last year. And that situation likely could lead to concerns among some wireless carrier executives who had hoped the launch of the high-profile gadget would encourage Samsung fans to switch carriers.
Most recently, BayStreet Research reported that GS9 preorders among the nationwide carriers are down 35% to 40% when compared with similar preorder sales for last year’s Samsung GS8. The firm said that, as a result, it will lower its GS9 sales forecasts to as much as 20% below the sales that Samsung generated last year via its GS8. BayStreet closely tracks the sale of smartphones in the United States.
Similarly, Wave7 Research reported that GS9 preorders were down versus GS8 preorders in 2017, based on the firm’s sources and checks.
“These sources pointed to the weakness of the carrier offers, which generally include a value of $350 for trading in a high-end device that inherently has high value, such as an iPhone X, an iPhone 8, or a GS8,” Wave7, which closely tracks wireless carrier pricing and promotional activity, wrote in a recent research note to subscribers.
Some, though, appeared to disagree. Counterpoint Research, for instance, forecast that Samsung will sell 43 million units of the GS9 this year, up from 35 million GS8 phones sold in 2017.
For its part, Samsung did not respond to a question from FierceWireless about the issue.
The potential of sluggish sales of the GS9 may be motivating carriers to improve their offers for the gadget. For example, AT&T is offering to take $595 off the cost of the device, while Verizon is offering a buy-one, get-one GS9 promotion.
The issue is key for wireless network operators that are increasingly seeing customers hold onto their phones for longer and longer periods of time. Indeed, T-Mobile’s CFO recently said that the carrier’s customers are holding onto their phones for around 34-35 months—far longer than the 24 months wireless customers traditionally maintained under the industry’s previous two-year smartphone subsidy model.
That model has been largely replaced with equipment installment plans (EIP), which allow customers to more clearly see the full cost of their device and that also reward them with a cheaper monthly service bill when they pay the gadget off.
Thus, according to T-Mobile’s CFO, carriers are now increasingly looking to the launch of flashy new smartphones as a way to encourage customers to buy a new phone—and to potentially switch providers.
"We do believe that it [handset replacement cycles] will reach a normalization, an equalization, and that switching events will be driven more around iconic phone launches,” T-Mobile’s Braxton Carter said during a recent investor event.
Thus, it appears that the launch of the Samsung Galaxy S9—the 2018 flagship device from the world’s largest smartphone vendor—may not be the iconic phone launch, and switching event, for which some carriers had hoped.