NPD: Smartphone Upgrade Plan Enrollment Quadruples from 2013

PORT WASHINGTON, N.Y. June 3, 2014 - Smartphone buyers are quickly adopting the early upgrade plans offered by their wireless carriers. Upgrade plan enrollment has more than quadrupled since September 2013, going from 7 to 31 percent by the end of the first quarter (Q1) 2014, according to the new Smartphone Early Upgrade Plans report from NPD.

The rapid acceptance of these new plans can be attributed to the high level of awareness among mobile phone owners. Overall, 73 percent of mobile phone owners who were asked if they were aware of the early upgrade plans being offered were ‘somewhat’ or ‘very aware’, with about half of these people being very aware.

“As one might expect, older consumers are less interested in frequently upgrading their phones; but, surprisingly, Android smartphone owners are as interested in upgrading as their iPhone counterparts,” said Stephen Baker, vice president of industry analysis, adding that 22 percent of Android and 25 percent of Apple owners are extremely interested in upgrading their phone more frequently.

Interest in Upgrading Phone More Frequently

Among Those Not Currently Enrolled in an Early Upgrade Plan
Source: The NPD Group Inc. / Smartphone Early Upgrade Plans: Consumer Perceptions & Participation

Keeping up with the latest technology was cited by 84 percent of smartphone owners as the most influential reason why they signed up for an early upgrade plan. Money was next on the owner’s mind, with 62 percent saying being able to finance the phone in monthly installments influenced their decision. These were also the top two reasons that, in the end, most attracted the owners and helped convince them to enroll in an early upgrade plan.

Reasons Influencing Enrollment in Early Upgrade Plan

Among July 2013-March 2014 Smartphone Purchasers from AT&T, Sprint, or Verizon
Question not asked to T-Mobile subscribers given no alternative contract plans available
Source: The NPD Group Inc. / Smartphone Early Upgrade Plans: Consumer Perceptions & Participation

There are also many smartphone owners who are perfectly happy with their device. Thirty-two percent were simply not interested in upgrading, 25 percent said they were unaware of the plans, and 19 percent said the sales associate never mentioned the possibility.

“The success of the early upgrade plans has been tempered by ongoing challenges in the ability of the carriers’ retail channels to explain and sell the value of these programs,” said Baker. “We found that a significant number of potential buyers did not receive information, or properly understand these plans at the point-of-sale. Carriers could potentially add to the success of these new plans by properly addressing these issues.”

A U.S. representative sample of 3,572 mobile phone owners (age 18+) were surveyed via NPD’s online panel in March 2014. Among them, 2,290 owned a smartphone.

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