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Smartphone Upgrade Cycle Increases To 29-Months In The US

April 18, 2016 - Written By Kishalaya Kundu

So how long do Americans use their smartphones on an average? The answer is twenty-nine months as of the first quarter of this year, according to data from Citibank. That is a significant rise from just a couple of years earlier when Americans used to carry their smartphones for a period of around 24 – 26 months before trading them in for newer models. While there is no concrete explanation for exactly why mainstream consumers in the country are keeping their handsets for longer than they’ve ever done before, most observers seem to point towards a couple of recent developments within the industry as possible causes for the emerging trend.

Firstly, all four major carriers in the country have done away with the subsidy regime that actively encouraged users to trade in their smartphones in order to get new ones. Customers knew full well that all they have to do is pay the $200 down payment once every two years to get their hands on a shiny new plaything replete with new features and capabilities. Recently, however, the carriers started structuring their monthly fees in a way that separates device charges from plan charges, meaning, once you pay off your smartphone on a monthly installment, your overall bill reduces by anywhere between $15 to $40 on a monthly basis and the longer you keep using the same old device, the longer you don’t have to pay those additional charges. However, that is apparently not the only reason why people are choosing to continue on with their smartphones for longer periods of time.

Industry insiders and sections of the media also seem to think that the lack of innovation within the smartphone industry may well be yet another issue that’s holding back consumers from reaching for the latest and the greatest, as most new devices bring forth only small, evolutionary changes rather than life-altering revolutionary ones. While Citibank doesn’t get into the nitty gritty of the emerging trend, the fact still remains that less and less people are willing to part with their hard earned money for devices that will at best bring some incremental upgrades over the model they already own. According to reports, 35% of U.S. postpaid subscribers upgraded to a new handset in 2011, but only around 30% consumers did the same last year. There’s no telling by how much that number will go down this year, but it does seem likely that it will.