PwC’s Strategy& division looks at the impact the removal of smartphone subsidies and new era of used devices and trade-ins is having on carriers and OEMs.
The domestic cellular market has witnessed a wave of new operating models highlighted by the push from operators towards removing device subsidies from the retail picture. This has led to consumers paying full price for devices, though with that price typically spread out over a specific term.
This had led to the market placing a much greater value on devices and consumers extending the lifespan on those devices. Also, with carriers now removing the subsidy option, consumers are looking towards second-hand channels if they need to replace a device for any reason.
Further muddying the waters have been device lease programs offered by some carriers that tie certain devices to a payment term, at which point the consumer can either pay off the remaining balance on the device and keep it, or turn it back into the carrier for a new device lease. These devices coming back into the carrier hold a certain amount of value for the carrier and when returned back into the used device market provide additional options for those consumers.
On this week’s Carrier Wrap, we spoke with Dan Hays, partner at PwC’s Strategy& division, to gain some insight into how the used device and trade-in market has impacted operations for both cellular carriers and device makers.
Thanks for watching this week’s show and make sure to check out our next Carrier Wrap when we speak with mobile virtual network operator DataXoom on its approach to targeting enterprise customers.
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