Faster upgrade plans like AT&T Next could be new frontier in wireless
Main targets of new plans are the young and tech savvy, who want latest phones sooner
Computerworld - AT&T's Next smartphone and tablet upgrade and no-contract plan, announced Tuesday, competes with a similar plan called Jump! from T-Mobile and another expected soon from Verizon Wireless.
Verizon is reportedly working on a no-contract plan called VZ Edge that would allow customers to upgrade to new phones once they've paid off half the balance of their current phones. The website Droid-life reported that VZ Edge will launch Aug. 25, although Verizon wouldn't comment.
All of these approaches, and possibly another coming from Sprint, are tactical responses by the carriers to fundamental, ongoing changes in the wireless industry. As the major carriers spend $20 billion over five years to upgrade their networks to faster LTE and related technologies, they must rely on an arsenal of tactics, such as more frequent device upgrades and no annual service contracts, to keep their customers from leaving.
Behind that reality is that all the wireless carriers also want to attract their future base of the most highly coveted customers -- those tech-savvy users under 35. They make up the biggest demographic group most interested in using the latest smartphones and having network access for plenty of available data. As those heavy data users age over time, all the carriers want to be first in line to serve them.
"This is going to be interesting. It's a new frontier," said Bill Menezes, an analyst at Gartner, referring to the carriers' recent moves.
Those customers wanting more frequent upgrades than the traditional one-device- every-two-years are in the minority, five analysts agreed. They tend to be early adopters of technology and mostly under 35.
The upgrade plans also tend to favor users keeping to a consistent smartphone operating system, like iOS or Android, Menezes said. Users will want to keep the apps they acquired with a specific OS on a new device running on that OS, he said.
But in coming years, carriers may work out ways to make those apps portable to most any OS as customers store more apps in the cloud, Menezes added.
IDC analyst John Weber said that until now, about 54% of consumers have waited 24 months or longer before purchasing a new smartphone or tablet, most likely because of the two-year contract model. Otherwise, they are breaking the contract and must pay a penalty of up to several hundred dollars.
"All the carriers knew things had to change, and T-Mobile drove their hands," said Patrick Moorhead, an analyst at Moor Insights & Strategy. "The entire U.S. telco system is maturing and carriers are scrambling to meet the more diverse needs of consumers."
To generalize, Moorhead said, the plans either cater to consumers who want to retain devices longer and pay lower monthly fees or the tech savvy users who "love devices and want new ones more than once every two years."
- Sprint to resell Google Apps for Business cloud service
- Samsung's S5 mini: Slimmer and slower than S5, but still scans fingerprints
- Privacy-focused Blackphone starts shipping to early adopters
- Why you shouldn't buy the Amazon Fire phone
- A closer look at the new technologies in Amazon's Fire smartphone
- Amazon's Fire phone is 'Prime' example of customer first
- Amazon's expected smartphone already faces skeptics
- Update: Tizen OS declared 'dead in the water'
- LG's new G3 smartphone: Simpler is better
- LG G3 sports quad-HD screen and laser autofocus
- SANS: Next-Generation Datacenters = Next-Generation Security This whitepaper takes a look at some new technology that may allow security teams to implement more flexible and capable protection models in...
- SANS: Protecting Virtual Endpoints with McAfee Server Security Suite Essentials SANS review of McAfees Server Security Suite Essentials that address some of the emerging challenges of securing virtual platforms and cloud environments.
- Safeguarding the Next-Generation Data Center Use of virtual and cloud servers has exploded. Unfortunately, security often lags behind. McAfee recommends looking at innovative solutions in order to erect...
- Aberdeen: Securing the Evolving Datacenter This report highlights ways security technologies and services are evolving to provide the visibility and control needed to deploy workloads flexibly in the...
- Is SQL Server AlwaysOn really as powerful? Tips and Tricks from the field With the introduction of AlwaysOn, Windows Clustering Services is now more critical than ever.
- What Does it Take to Deliver a Superior Customer Experience? The Two Top-Rated Online Retailers, B&H Photo and Crutchfield Electronics, Share Their Secrets Discuss practical CX tools and service methods such as contact center agents and the use of realtime speech analytics to help contact center... All Wireless Carriers White Papers | Webcasts