Are you willing to spend more than $1,000 on a smartphone every two years? For more and more consumers, the answer to that question is no. Average smartphone users are holding on to their phones for longer periods of time, and Apple phone owners are waiting even longer to buy new models. Sarah Krouse reports in The Wall Street Journal:
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. AAPL -0.66% 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.
That has meant that some buyers try to make their phones last longer. Many families pass down to their children smartphones that are fully paid for or hand them to other relatives on their plans.
Changes to the structure of wireless phone contracts have forced more customers to pay full price for devices that were once subsidized by big carriers like Verizon CommunicationsInc. and AT&T Inc. Carriers in recent years have offered less-generous promotions and separated the cost of a phone from a customer’s monthly service fees, leading to the demise of the two-year ritual of upgrading devices and service contracts simultaneously.
Read more here.
Jeremy Jones, CFA
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