Americans are upgrading their phone less frequently thanks to installment plans
Smartphones have quickly become an essential part of our lives. Having the latest and greatest device is important to a lot of people. The desire to upgrade hits every time a new device is announced (which is nearly every week). Unfortunately, price plays a big part in how often you can upgrade. A new report from The WSJ claims that Americans aren’t upgrading nearly as often as they once did.
When smartphones first came around, carriers were still using the subsidy model. A top of the line device would cost around $200 up front. That was it. Most consumers had no idea that the actual cost of the device was around $600. Recently, carriers have switched to a new installment-based model. Customers are required to pay the full price of the phone over the course of several months. Like a car payment or mortgage.
As it turns out, people don’t like adding another monthly bill. A new estimate says Americans are now replacing their phone every 29 months. That number was only 24 months for the last two years. Installment plans are most likely having an undesirable effect, but they might not be the only culprit. The quality of smartphones has gotten to a point where there isn’t as much incentive to upgrade. For example, the changes from the Samsung Galaxy S6 to the Samsung Galaxy S7 aren’t nearly as big as going from the S2 to S3.
Couple that with the idea of making payments every month and suddenly you have a lot of people saying “I’ll stick with my phone.” Where do you fall in this situation? How often do you upgrade to a new phone? Do you pay for your phone every month, or are you buying devices with an upfront payment?