US Carriers Open Door for Microsoft and Nokia

Posted: July 16, 2013 in at&t, Microsoft, Mobile, Nokia

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The new plans from T-Mobile and AT&T which allow customers to upgrade their phones as frequently as every 6 months as it is in T-Mobile’s case or every 12 months in the case of AT&T may just give Micosoft and Nokia new opportunities to not only gain much needed market share, but steal away the very valuable and influential smartphone enthusiasts who crave the cutting edge hardware they crave.

Mac or PC – It’s an Investment

My reasoning is that consumers aren’t married to their smartphone platform in the same way they are for their Windows or OSX based computers and laptop.

When you purchase a laptop or desktop computer, you are making an investment in hardware. Neither Windows of Macs come with productivity software, so the consumer makes additional investments in a word processor, photo editing software, video editing software, software to play DVDs or Blurays.

This is a big investment to make and one that you plan on leveraging for years to come. Upgrade it little by little and very quickly you have, “bought into” the platform you chose.

Smartphones

Up until this summer, Americans “buy a phone” for a discounted rate and are locked into a contract for 24 months – this lock isn’t just for their wireless service, it’s also linked to the smartphone you purchase.

Apps are for the most part free and an “expensive” app or game could cost you $10, but more than likely, if you buy an app it will yt between $2-$3.

Like in the example above, you have now invested in the cost of the phone, you may have purchased some apps, but the investment is very small and I’d argue many people spend much more a at Starbucks in one visit than most people pay for their apps in 6 months.

Smartphone users no longer have the same capital invested in apps and games because they are free or very low cost, they still have the 2 year commitment to the smartphone.

This commitment to one phone, one platform for 24 months is not to be taken likely and I believe that people’s loyalty to their 2 year plan extends to the device they chose and for many people they make the most of it and select the “best phone at the time.”

Next and Jump!

So now we have the plans from AT&T and T-Mobile which allow users to exchange their phone on a more frequent basis and since the users never buy the phone and have to trade it in to get the newest plan they now have the opportunity to get a new phone – a clean slate.

So every 6 or 12 months customers can trade in their current phone for a brand new device. There is a premium for this service, but making a trip to Starbucks once a day is much more costly than these carriers’ premium plans.

So now the 2 year commitment is out of the equation and consumers who choose one of these plans they now have the mindset that they phone they have today will not be the phone they have next month or in the near future.

The shackles are gone

If Nokia and Microsoft and Blackberry for that matter can come out with phone designs that are compelling on a reguar enough basis, keep them current and up to date, the person who has an iPhone, Galaxy or One trades in the phone they have only had for a short period of time, they are free to choose the smartphone with the most “wow factor.”

I could see many people who purchased a high end smartphone from Apple, Samsung or HTC trade and on their 6 or 12 month cycle “try” a phone like the Nokia Lumia 1020 – with its revolutionary 41MP sensor and HD zoom technology.

One of the biggest barriers to switching phones has been removed and in AT&Ts case, after 12 months, they can exchange their year old phone for the latest and greatest with no money down – not even any fees.

What about the App Store?

While I will be the first to say that there are some holes in the Windows Phone 8 Store, most people will never notice – well, maybe after Instagram gets released for Windows Phone, but seriously, there are an abundance of apps in the Store and while there isn’t everything, if consumes switch platforms, the developers will follow their customers to Windows Phone.

Gosh, once users have HERE Drive+, HERE Transit, HERE Maps and discover the built-in and instantly accessible app-like features built into Bing on Windows Phone, they will see the wealth of features available to them and everyone who has a Windows Phone out of the box – it’s really an amazing feeling showing an Android or iPhone users Bing Vision or Bing Music. They go nuts!

Loyalty and Superfans [Disclosure: I am a Microsoft and Nokia superfan]

For every Android, iPhone or Windows Phone 8 superfan out there, there are 30 more who are not loyal to any of the smartphone platforms. These people are heavily influenced by that one friend, co-worker or family member and will then make a purchase based on what these people have.

If Nokia and Microsoft can come out with smartphones with WOW features that people really can relate to and then see the superior results immediately – like with an ultrahigh resolution phone with “zoom later” capabilities, then I believe these people, the non-techy people will be drawn to the “new” Windows Phone platform.

Of course, if Microsoft and Nokia don’t upgrade both the operating system with more features and improve upon not just the phones camera, but evolve beyond the imagination they will get more users leave Android and leave iPhone.

Wrap-up

So while these plans for power users aren’t for everyone, they do allow consumers in the US who are locked to a carrier in 2 year contracts one to three additional times in their contract to trade-in the old for the WOW!

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