April 16, 2024
Handset Average Sales Prices Are Increasing In Q1 2024
Our predictions continue to unfold as we have previously documented.
The impact for Telco P&L is going to be quite dramatic, as the only area of substantive growth on a Telco balance sheet is "Hardware Sales".
It appears that device life cycles are increasing, and whilst that can improve profitability it does come at the expense of top line revenue growth.
The cold hard reality is that because Smartphone Hardware costs represent 60%+ of total costs for Customer Acquisition & Retention (renew your plan and get a free/heavily discounted phone) it will translate into :
- Double digit price increases for the rate plan
- Increased layoffs due to Wall Street pressure on flat lining revenue for Hardware Sales
- Increased financing costs due to a weakened "story telling" ability
ARTICLE SOURCE : https://www.idc.com/getdoc.jsp?containerId=prUS52032524