Samsung is working on a U.S. financing program for its Galaxy smartphones, which is expected to allow buyers to pay for them over 1-2 years on a monthly instalment plan, reports Forbes. The move comes shortly after Apple launched its own plan, called the iPhone Upgrade Program.
Samsung may be launching this leasing program in the next several months, although that timeline may accelerate, the executive said.
Carriers have been moving away from so-called subsidized contracts, where the cost of a new smartphone is hidden in the monthly service plan fee and the cost of a new device appeared to be anything from free to $200. With true purchase costs now much more visible, manufacturers have a strong incentive to offer attractive financing in order to encourage regular upgrades …
While the terms are not known, it’s likely that Samsung will adopt a similar approach to Apple, where you pay off the cost of the phone over two years but can upgrade to a new model every year. Apple’s plans start at $32/month.
Financing deals are already available through carriers, but a manufacturer scheme locks buys into the maker’s own devices. Samsung has been struggling to compete with both Apple and Chinese Android handsets, its smartphone business seeing a 37.5% drop in operating income in Q2 and reportedly laying off 10% of its workforce.