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T-Mobile USA 'JUMP'Starts Handset Upgrade Cycle Wars

by Neil Mawston | 7月 12, 2013

There is a rising wave of flagship smartphone launches from OEMs almost every fortnight in last eight months. This is as a result of intense competition and dramatic spec-wars to out-differentiate each other (thanks to Android) have reduced the overall product lifecycle/refresh-cycle/launch-cycle for major OEMs to almost 7-9 months.

Consumers in developed markets such as USA or Europe consumers are locked into two-years on postpaid contract. Rising demand for premium flagship models in these highly subsidized markets have challenged operators’ profitability which have forced some of them to elongate the early upgrade window back to 24 months. This has led to immense frustration among consumers which almost most of them missing at least one product refresh cycle.

To capitalize on this trend T-Mobile USA on July 10th 2013 announced its new & revolutionary “JUMP” program which allows its customers to upgrade to the latest smartphones twice every 12 months and without any contracts, however the customer has to enroll in this program at start for $10 a month. What this means is we could see a move which will help T-Mobile differentiate, improve consumer stickiness and thus reduce churn with less shackles to upgrade to their new favorite device. We also believe that this might kickstart “upgrade cycle wars” in USA and will not only accelerate ‘new’ handset ‘replacement cycle’ a boon for OEMs but also ‘second hand/used’ handset market, for companies like Gazelle, eBay and ReCellular selling recycling and refurbising devices.

Here is the snapshot on how the “handset upgrade” landscape looks like across big four carriers:

 

Source: T-Mobile 

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