Nearly Half Of Smartphones Sold In America Linked To Installment Plans

Mobile users based in the United States appear to be warming up to installment plans for smartphones. At least according to the information collected by research firm Kantar WorldPanel ComTech. In three months spanned June, July, and August of this year, Kantar determined that 47 percent of all the smartphones sold in the US were linked to installment plans, as explained by Carolina Milanesi, chief of research at the firm. During the same period, Kantar also found out that purchases made through regular contracts made up only 20 percent of the total sales. As for the rest? They were all linked to prepaid plans.

This pattern seem to be the same with regards to iOS and Android mobile users electing to take the installment plan option but showed differences in the regular contract versus the prepaid set up. From June until August of this year, 51 percent of the sales of Apple's iPhone devices were made via installment or off contract plans, 37 percent through standard contracts, and 12 percent through prepaid plans. Moreover during the same period, 46 percent of Android devices were sold via installment or zero contract plans, 15 percent through standard contracts, and 39 percent through prepaid plans.

In previous years, consumers of smartphones normally purchased their devices for a subsidized amount that locked them into a two year agreement. Today, however, the big four major wireless carriers in America (Verizon Wireless, AT&T, T-Mobile, and Sprint) now offer, or force customers to go for smartphone plans that require them to pay for or lease the device in full, with the option to upgrade to a new handset after a specific period. An option like this often makes customers either pay for the handset upfront or pay additional cash every month to cover the device’s full cost. To be safe, customers often would do away with plans that force them to pay the full retail price of a handset rather than the less expensive subsidized cost. 

However, according to Kantar’s data, the opposite appears to be true, especially with specific high profile handsets. For instance, from June to August of this year, 55 percent of iPhone installment plans were for an iPhone 6, while 22 percent were for an iPhone 6 Plus. As for Samsung mobile devices purchased via installment plans, 36 percent were for the Galaxy S6, while 12 percent were for the Galaxy S6 Edge.