GlobalData’s Pricing and Promotions services track US handset promotions at carriers, OEMs and big-box retailers on a daily basis.

Per the data collected, the first quarter of 2024 witnessed 17 types of promotions for smartphones and as always, trade-in offers were the most popular.

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Traditionally, trade in and upgrade/trade-in offers have been the favoured means of promotion for  premium devices. The promotions’ terms often require the user to remain subscribed to the carrier’s high-end plan (to be eligible for the maximum promotional value) which ensures higher ARPU over determined period of time (24-36 months). Trade-ins also bode well for upgraders and switchers who are looking to obtain the next trendy device without having to go through the hassle of selling their existing handset or disposing the device.

However, trade-in offers only apply to customers with a suitable device to divest, often excluding first time users and those with older devices, forcing them to cough up the entire cost of new flagship devices.

Carriers promotion experiments

This quarter, Verizon and AT&T experimented with offering multiple promotion types on their premium devices to counter demand fatigue brought about by the change to their EIPs (Equipment instalment policies)- both carriers extended their EIP terms from 24 and/or 30 months to 36 months in a likely effort to reduce monthly premiums.

 In Q1, Verizon began offering its iPhone 15 series and premium Pixel device users a competitive mix of unique offers and trade-in offers, enabling customers to pick the promotion that would maximise their savings. Unique promotional offers featured up to a $720 discount on select devices such as the Pixel Fold on Verizon’s Ultimate plan, allowing users without a viable trade-in device to still take advantage of high-value discount offers. Like Verizon, AT&T also suffered from a softening of demand due to an extension of its device instalment terms in 2021.

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To counter this trend, the carrier offered its users a combination of promotions on select devices, enabling them to pick the option that maximises their savings. While this practice is not novel (rival T-Mobile has offered a combination of promotion types on its premium devices for a while now), it is an indication of an upcoming trend where more carriers are willing to allow their users to pick promotional offers that maximises their savings. This practice is likely to gain momentum in the upcoming months where the impending downturn of the economy is unlikely to have users lining up to trade in their somewhat new and functional device to take on the additional financial responsibility of the latest model.

Pushing promotions such as BOGOs (buy one, get one free) on a regular basis will also help carriers control their inventory especially during the holidays. Tier one carriers generally set the tone for the rest of the industry and if AT&T, Verizon and T-Mobile continue this trend of offering multiple promotion options on flagship devices, it’s only a matter of time before straightforward discounts without a trade in become the norm rather than the exception.