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North American Smartphone Replacement Time Growing from 2 to 3 Years
September 03, 2019

Smartphone sales growth is decelerating in North America and the ROW as devices are being held for nearly three full years compared to previous years when a 2-year cycle existed. That’s the key takeaway from a new Strategy Analytics survey, which confirms anecdotal reports from Apple and other smartphone vendors of slowing upgrades. According to the research firm, consumers believe that prices have been increasing, but with too little major innovation between flagship device generations. Prices for 5G phones will be a key barrier, despite 1 in 4 recognizing it as being important for their next device.” Older buyers are increasingly delaying smartphone upgrades for three or more years, and the average iPhone has already been in use for 18 months, versus 16.5 months for Samsung. Strategy Analytics used a “U.S. nationally representative sampling” of 2,500 smartphone owners aged 18 to 64, and that premium customers — those spending $1,000 or more on phones — represented a fairly small 7% of the survey. The firm says that two key groups, women and Gen Z (users aged 18-24), strongly value camera features and quality, areas where Apple and Samsung have been aggressively innovating over the past few years. On the software side, both Gen Z and Gen Y (users aged 25-39) are increasingly seeking tools to manage and reduce device usage time. According to separate research by the Consumer Technology Association, U.S. smartphone unit sales will likely decline by 2% this year, rather than growing or staying flat. However, 5G devices will begin to move the needle within the category, and the CTA expects sales of 2.1 million 5G devices by year’s end. In South Korea, a combination of wider 5G network availability and hyper-aggressive pricing have led to strong demand for new 5G smartphones and services over the past several months. Three Korean carriers collectively reached the 1 million 5G customer mark in only 69 days, and SK Telecom announced today that it individually reached the 1 million 5G subscriber mark yesterday, less than five months after commencing service. In each case, the 5G uptake has been markedly faster than with 4G. U.S. 5G rollouts have been relatively modest thus far, scattered across only small sections of handfuls of cities. Moreover, while Korean carriers have offered strong rebates and incentives to sign up customers, U.S. prices for 5G devices have generally — but not universally — been upwards of $1,000, which combined with multiple 5G network uncertainties may have dampened initial interest here. From: VentureBeat