Samsung said it will launch a new phone upgrade program for users in South Korea this week, enabling them to switch to new smartphones once a year.
Reuters reported that users who buy the new Galaxy S7 or S7 Edge though Samsung's 24-month installment plan will be eligible for the program, which costs $6.35 a month in addition to the phone payments. After a year, they'll be able to trade in their existing phones and upgrade to a new Galaxy S or Galaxy Note device.
Samsung was the world's largest smartphone vendor during the fourth quarter of 2015, according to Strategy Analytics, claiming a 20.1 percent share of the market. Like its rivals, however, it's struggling to maximize profits as smartphone sales slow globally due largely to increasingly saturated markets.
Slower handset upgrade cycles have become a major challenge for vendors and carriers as well as the industry moves away from subsidized devices and two-year contracts in favor of equipment installment plans (EIPs) and leased phones and tablets. Apple last year launched its own upgrade program, which starts at $32 a month and enables iPhone users to trade in their phones for newer models every year.
The strategy not only is aimed at encouraging users to upgrade their devices more often than they otherwise would, it enables hardware vendors to enhance their direct relationships with consumers, potentially removing a key touch point for carriers. If Samsung's upgrade program gains traction in South Korea, the manufacturer is likely to roll it out to the U.S. and other markets. Representatives from Samsung were not immediately available for comment.
For more:
- see this Reuters report
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