Can you spot the hidden product innovation?

Can you spot the hidden product innovation?

A few days ago, T-Mobile announced its new JUMP (Just Upgrade My Phone) initiative. The company has established itself as an innovator in recent years, and for good reason. As a small up-start, it needs to distinguish itself from the bigger players like Verizon and AT&T.

T-Mobile’s JUMP plan is pretty interesting. For an extra $10 per month, T-mobile subscribers can upgrade their phone every six months to whatever the latest and greatest mobile device happens to be at that point in time. The typical mobile phone subscriber upgrades phones every 18 – 24 months, so this seems like a good deal, right?

Well, it depends. The Verge has a great write-up on the pros and cons of T-Mobile’s JUMP plan, and the short answer is that if you don’t upgrade every 6 months, the plan might not be great for you. Why wouldn’t you want to automatically upgrade? Well, you may want to wait for an upcoming killer phone, or you may feel that your current device is just fine. You may forget, get lazy or just not feel like it. The point is, not everyone is going to want to upgrade every 6 months. For people in this situation, that monthly $10 charge plus the net proceeds of selling a used phone on the secondary market exceeds the value of forgoing the plan all together.

So to summarize, T-mobile has just announced a service that provides economic value to those who use it at certain times, and that economic value is effectively subsidized by people who don’t use the service. Ladies and gentlemen, T-Mobile’s triumph of innovation is nothing more than an inexpensive consumer insurance policy.

Innovation is all about finding novel applications for existing offerings.


That’s right. This high-tech mobile network operator is getting written up as a clever innovator on technology sites like CNET, PC Magazine and getting press from business publications like Bloomberg  and Business Insider.

When people think about innovation, they often think of technology or new product development. The reality is that innovation can take many forms. In T-Mobile’s case, the company has innovated by taking a relatively humble insurance product and using it to fulfill a need faced by its customers.

So there you have it. A new product, a lot of press, and a new revenue stream all built on the back of a simple $10 monthly insurance policy. It’s all about the packaging.

Are you an insurance player looking to understand how you might be able to deploy your products in new, innovative ways? Are you a retailer who wants to understand how to differentiate your offerings by pairing them with financial service offerings? Are you curious about how you can repackage existing offerings to develop new ones? Why not give us a call? We can help.

About the Kabardian Group: We help clients achieve profitable growth. Short, simple and to the point. Our clients include companies large and small and at every stage of their development, including start-ups.

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