High prices, trade-in values drive iPhone users to embrace installments

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A new report from Consumer Intelligence Research Partners (CIRP) reveals that there are more iPhone customers opting for installment-based purchases instead of paying for the full price of their units upfront. According to the firm, the high costs of Apple’s products alongside its trade-in deals might be playing huge roles in this discovery.

According to the research company, 55% of iPhone buyers get their units via installment, while only 38% pay upfront for their purchase. Android’s figure is the opposite, with a lower installment share at 44% and 49% for a full payment basis.

This is unsurprising, nonetheless, as Apple is known to consistently push its installment options to users, not to mention it has partnerships with various carriers to further force the sale of its units in different ways. It even increased the trade-in value of some old iPhone models ahead of the iPhone 15 release, making its offers more attractive to the market. Moreover, iPhones fall under the premium department of the smartphone market, making Apple’s smartphone models too much for some people.

With this, as expected, CIRP’s data for Android for installment purchases is lower compared to iOS users. To note, compared to iOS smartphones, there are different companies running the Android system on their smartphones. Add to that, brands like Samsung are frequently releasing different phone models, with many of them aimed at budget buyers. The latest iPhone 15 base model, meanwhile, starts at $799 (128GB). As such, CIRP believes that iOS customers resort to trade-ins and installments.

“As part of these transactions, new phone buyers can usually trade-in their old phone to reduce their out-of-pocket expense,” the report explains. “Trade-ins paired with installment purchases generally amortize the value of the old phone over the course of the installment plan, creating a de facto contract with the carrier. So the early retirement of a phone can sacrifice some of the value gained from the old phone. Mobile carriers have used elevated trade-in value promotions to encourage upgrading, and subtly lock in customers for the length of their new installment payment agreement.”