Mobile devices have become omnipresent in our personal and professional lives. With increased dependence on these smartphones, coupled with rising prices and the introduction of financing plans, mobile carriers have an opportunity to benefit from the growing number of upgrade and protection plan options available to consumers.
The current North American market is comprised of upgrade plans, protection plans, and a select number of combined upgrade and protection plans, each with varying levels of adoption. In November 2021, Altman Solon conducted a survey of over 3,000 U.S. and Canadian consumers to gain insight into current plan ownership and likelihood of adopting, renewing, or cancelling device upgrade and protection plans. Survey findings support a growth story for the future of the upgrade and protection plans market, with 66% of consumers with a device protection plan likely to renew and 74% with an upgrade plan likely to do the same. As the market grows, carriers will benefit from the increased flow of revenue and reduced churn.
However, the survey also sheds light on prominent consumer pain points around a plan’s perceived value, flexibility, and convenience that contributed to increased churn. In fact, of those who selected “value” as one of their top three pain points with upgrade and protection plans, receiving a new, as opposed to refurbished, phone is either very or extremely important when upgrading the device. In addition, allowing the consumer to decide whether to fix their current device or receive a new one when broken offers increased flexibility in protection plans. Ultimately, Altman Solon’s survey and simulations showed that innovations by carriers around convenience, flexibility, and value, could lead to reduced churn and increased recurring revenue for consumers and enterprise customers alike.
- Improving convenience, flexibility, and value of upgrade and protection plans can drive consumer adoption of either protection or upgrade and protection offers by 50+%
- There is opportunity for carriers to offer upgrade and protection plans to bring your own device (“BYOD”) enterprises as an employee perk
- Better alignment between upgrade & protection plans and customer needs will unlock growth potential for carriers, helping increase market share and customer lifetime value
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Leadership & Oversight
Thank you to Liz Lavin, Tatiana Vierma, and Nina Limaye for their contributions to this report.
This report represents the independent perspectives of Altman Solon, although it was produced as part of a paid client engagement.