Smartphones are too expensive and its forcing the industry to change – Business Insider

  • New data says that fewer than 10% of consumers in the United States are willing to spend $1,000 on a new smartphone.
  • The report comes as smartphone prices have gradually increased in recent years.
  • As smartphone prices have gotten higher and shipments across the industry have stalled, companies like Apple, Samsung, and Google have altered their strategy by launching more affordable smartphones.
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Although industry giants like Apple, Samsung, and Google have been pricing their new smartphones at around $1,000 over the past two years, new data shows that such a cost is simply too high for most people.

Less than 10% of consumers in the United States are spending more than $1,000 on a new smartphone, according to market research from NPD Group. The firm gathered the data using its Mobile Phone Tracking tool, which uses advertising technology to monitor active devices in the US.

The study is the latest evidence suggesting that tech companies have had a hard time convincing consumers to upgrade to new devices each year as prices increased. Market research firm Kantar Worldpanel reported in 2018 that the average life cycle of a smartphone increased by roughly two months between 2016 and 2018, indicating that consumers had been holding onto their devices for longer periods of time before upgrading.

Global smartphone shipments in general have also been struggling; the industry suffered seven consecutive quarterly declines until the third quarter of 2019, when shipments rose by 0.8%, according to the International Data Corporation.

Some of the world’s most influential tech companies, like Apple, Samsung, and Google, have shifted their smartphone launch strategies in recent years to reflect this change. 2019 saw a wave of less-expensive smartphone launches, like the $750 Galaxy S10e from Samsung, the $480 Pixel 3a from Google, and the $700 iPhone 11.