New mobile research shows new handsets and no-contract options are helping to drive upgrades

Parks Associates mobile research finds just 25% of T-Mobile subscribers prefer the traditional mobile contract model of a two-year contract with a subsidized handset. The research firm’s Choice of Mobile Device: The Consumer Perspective finds T-Mobile subscribers have embraced the company’s new programs that do not require a service contract. Among T-Mobile subscribers planning to purchase a smartphone, 33% prefer to pay full price upfront, and 31% prefer to pay in monthly installments.

“T-Mobile and AT&T have also tapped into the consumer desire for the latest and greatest smartphone with their early-upgrade programs,” said Harry Wang, Director, Health & Mobile Product Research, Parks Associates. “Fourteen percent of smartphone owners plan to upgrade their phone more quickly the next time, and 27% of these consumers cite special operator incentives as the reason for their quicker upgrade.”

These alternative plans, early upgrade and no-contract plans, are disrupting the market’s traditional purchase model for handsets. Parks Associates’ Q3 2014 consumer research of U.S. broadband households shows slightly more than 50% of U.S. consumers who are planning to purchase a smartphone in the next 12 months, regardless of brand, would prefer an alternative to the two-year contract model.

“Accelerated rollout of LTE services by operators worldwide, along with the launch of flagship smartphones like Apple’s iPhone 6 and Samsung’s Galaxy Note Edge in 2014, have transformed the mobile industry,” said Wang.

OEMs will showcase their top-tier smartphone models and smart watch products at the upcoming Mobile World Congress. Wang noted that operators must find effective ways to persuade smartphone users to upgrade early and purchase a bigger data pool while, at the same time, minimize voluntary customer churn.

“These alternative plans are one stone for two birds—they help operators acquire new subscribers and retain loyal, high-value customers,” Wang said. 

Choice of Mobile Device: The Consumer Perspective analyzes the impact of new handset purchasing models on the market for mobile phones. For more information on Parks Associates’ mobile research, visit www.parksassociates.com or call 972-490-1113. To schedule an interview with Harry Wang or request mobile data, contact Holly Sprague at [email protected], 720.987.6614. 

About Parks Associates: Parks Associates, a woman-founded and certified business, is an internationally recognized market research and consulting company specializing in emerging consumer technology products and services. Founded in 1986, Parks Associates provides business intelligence and research services through its proprietary methodologies developed over decades, including quarterly surveys of 10,000 internet households.

The company's expertise crosses many industries: home security and smart home, streaming video, broadband and pay-TV services, digital media and platforms, gaming, Wi-Fi and home networks, connected health, support, consumer electronics, home control systems, energy management, and tech solutions for the multi-dwelling (MDU), small-to-medium business (SMB), and commercial building markets.

Each year, Parks Associates brings thousands of leaders together for its webinars and annual events. The firm hosts the annual executive research and strategy conferences CONNECTIONS™, Connected Health Summit, Smart Energy Summit, Smart Spaces, and Future of Video. https://www.parksassociates.com
 

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