Verizon (NYSE: VZ) unveiled an annual upgrade program for customers who buy one of the two new Samsung Galaxy phones on the carrier's Equipment Installment Plan.
Users who pre-ordered the Samsung Galaxy S7 or S7 Edge through Verizon's EIP service will automatically be enrolled in the program, enabling them to upgrade to any new smartphone once a year when they return their old device and more than 50 percent of it has been paid off. The move expands on the upgrade offering Verizon launched last September for customers who purchased Apple's (NASDAQ: AAPL) iPhone 6s or 6s Plus.
Customers who aren't interested in upgrading can continue to pay off the phone over 24 monthly installments.
Handset upgrade cycles have become increasingly extended as the mobile industry moves away from two-year contracts in favor of EIPs and leased devices. So carriers and handset vendors are moving to upgrade programs as a way to encourage users to buy new phones more often.
Apple last year launched its own upgrade program, which starts at $32 a month and enables iPhone users to trade in their devices for newer models every year. Samsung last week launched a similar offering for users in South Korea and may be considering rolling it out in foreign markets if successful.
Handset vendors' upgrade programs are potentially a threat to carriers because it gives those vendors the ability to enhance their direct relationships with consumers, removing a critical touch point for operators. Verizon surely hopes its program helps to maximize hardware revenues as it allows the operator to cultivate subscriber relationships.
- see this Verizon web page
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