October 29, 2018
Upgrade? No Thanks. Americans Are Sticking With Their Old Phones
Contract changes, pricier smartphones lead consumers to keep their devices longer
Americans are holding on to their smartphones for longer than ever.
Pricier devices, fewer subsidies from carriers and the demise of the two-year cellphone contract have led consumers to wait an average of 2.83 years to upgrade their smartphones, according to data for the third quarter from HYLA Mobile Inc., a mobile-device trade-in company that works with carriers and big-box stores. That is up from 2.39 years two years earlier.
Apple Inc. iPhones traded in during the period were an average of 2.92 years old, and those phone owners held on to them longer than Android users, HYLA’s data through the third quarter show.
Smartphone makers have launched increasingly pricey phones in recent years, with some premium devices costing more than $1,000. Apple’s highest-end phone, the iPhone XS Max, costs $1,099.
The average replacement cycle for a phone in the US has lengthened by 22%.
Confirmation of our thesis that as employees experience the full cost of their BYOD phones they are lengthening the replacement cycle. The cost of the hardware as measured by Average Sales Price (ASP) continues to rise. Expect that the replacement cycle will rise with 90% correlation to the increase in ASP.
Don’t forget that reimbursement needs to include not just the plan but also the hardware.
Upgrade? No Thanks. Americans Are Sticking With Their Old PhonesBack