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Samsung Ultimate Test Drive: Inspired or Desperate?

Despite unveiling a new Galaxy Note 5 and Galaxy S6 Edge+ in mid-August, it seemed like no one was talking about Samsung’s (SSNLF) latest smartphones.

Samsung Ultimate Test Drive: Inspired or Desperate?

Source: Samsung

Why? Because archrival Apple (AAPL) was holding its iPhone event a few weeks later, and all anyone wanted to talk about was the upcoming iPhone 6S.

So Samsung reached into its bag of marketing tricks and came up with the Samsung Ultimate Test Drive.

The goal? To get current iPhone owners to try out one of the latest Samsung Galaxy devices, then ditch their Apple smartphone for a new Galaxy.

Given the timing of the promotion (which launched a few weeks before the iPhone 6S was unveiled), Samsung isn’t expecting anyone to turn in an iPhone 6S or iPhone 6S Plus. However, it is hoping the hoopla around the stunt will take some of the spotlight off the new iPhones and help discourage people from heading straight to the Apple Store on Friday without even considering other options.

A Trade-In Offer and Then Some

Here’s how the so-called Ultimate Test Drive works.

From your iPhone (no Android or Windows users, thank you very much), hit up the Samsung Promotions website. Pick from among the latest Galaxy devices and use a credit card to pay Samsung $1 in processing fees, plus a deposit. You then get that Samsung Galaxy shipped to your home for 30 days.

To help you take it on “the ultimate test drive,” the smartphone is even equipped with an activated SIM card, so users can test out voice calling and services that require wireless data.

Those iPhone users who are so smitten by the experience that they turn around and buy a new Galaxy smartphone can submit their receipt (and proof of having participated in the Ultimate Test Drive program) to Samsung to receive $100 in credit to Google (GOOG, GOOGL) Play.

Even better for these new Galaxy owners, if they traded in their iPhone when they bought that shiny Samsung Galaxy, Samsung will cut them a check for $100.

So, that’s essentially up to $200 up for grabs for iPhone users who are willing to go all-in when switching to a new Galaxy, plus 30 days for anyone with an iPhone to experience firsthand just how far Samsung has come since the days of the plasticky, bloatware-infested Galaxies of past years. It may mean Samsung ends up breaking even on the Galaxy smartphones it sells to participants, but that cost would be well worth it to convince any iPhone users — who are notoriously loyal to Apple’s brand — to make the switch.

Plus, the publicity of waves of switchers participating in the Samsung Ultimate Test Drive would help to ruin Apple’s iPhone 6S launch party.

But has Samsung succeeded, or has the marketing campaign instead backfired and added a whiff of desperation to its smartphone business?

Trade-In Programs Gaining Popularity

BlackBerry (BBRY) ran a trade-in program last year, offering up to $550 to anyone who traded in an iPhone 6 for a BlackBerry Passport. That move didn’t do anything to make BlackBerry seem like a contender.

Apple itself has also been quietly offering a trade-in (in the guise of a recycling program), offering gift cards or store credit to iPhone buyers who hand over their Android, BlackBerry or Windows smartphones.

Neither of these programs had the marketing splash of the Samsung Ultimate Test Drive promotion, and neither offered the 30-day free trial element. That trial period is a pain to pull off (especially with cellular connectivity thrown in), but it’s key to convincing people to take their time and make an informed choice about which product is actually better in real-life situations.

According to Samsung, the company quickly ran out of loaner smartphones. The website notes the “overwhelming demand,” although it isn’t clear how many devices were made available as part of the Ultimate Test Drive program.

Engadget spoke to a Samsung representative who said the response has “exceeded our expectations” and noted the company was working toward making more of the eligible Samsung Galaxy devices available.

Will Samsung’s Gambit Work?

So, let’s say that the Ultimate Test Drive has accomplished one of its goals — getting new Galaxy smartphones into the hands of some current iPhone owners — and it has done so in a manner that doesn’t make the company seem desperate. It’s offering up a small financial incentive for buying a new Galaxy and a little more for handing over an iPhone in the process, but the marketing material emphasizes the 30-day trial part of program and only alludes to the reward aspect.

As an iPhone owner who’s had the opportunity to spend extended periods of time with a new Galaxy (read my Galaxy S6 review here), I can attest to the potential effectiveness of this approach.

Too often, iPhone users are dismissive of the competition because they switched a few years ago, when Android smartphones were often made of cheap-looking plastic and Android noticeable lagged iOS in usability. In the Ultimate Test Drive promotion, Samsung is fighting back in the only way it can to convince iPhone owners to get past the knee-jerk reaction of dismissing its new Galaxy smartphones.

The Samsung Ultimate Test Drive having any material impact on sales of those new Galaxy smartphones seems unlikely, though — at least not from the iPhone camp.

Unlike previous years, Apple hasn’t officially released iPhone 6S and iPhone 6S presale numbers, but told Wired that the numbers were stronger than expected and on pace to beat least year’s record.

While there was some media interest when the Ultimate Test Drive was first announced, it was quickly buried in iPhone-mania. And Samsung hasn’t yet released numbers of actually switchers through the program or come clean on how many loaner smartphones are actually circulating.

Until we hear otherwise, let’s call the Samsung Ultimate Test Drive a nice try.

As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.

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Article printed from InvestorPlace Media, https://investorplace.com/2015/09/samsung-ultimate-test-drive-ssnlf/.

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