According to Retrevo's Technology Life Cycle analysis, a new study, 62% of U.S. smartphone owners perceived their phone to be obsolete now or will be obsolete before their contract runs out. And,
the phone carriers don't want the old phone and don't want to subsidize a new one sooner than every two years.
When the study asked smartphone owners whether they would consider changing
smartphones before their contract was up, 48% said they would if the terms were favorable while 20% said a two year contract on their device was fine with them. Others were not sure or might buy an
unlocked phone.
Most carriers require the consumer to hold onto a phone for two years before they can upgrade, which has created a condition where new phones appear much faster than consumers
are allowed to buy them. The survey found more than 120 new smartphones from major vendors over the course of about a year.
Smartphones Released From April 2010 to March 2011 |
Brand | New Phones |
Samsung | 30+ |
HTC | 20+ |
LG | 15+ |
Blackberry | 15+ |
Motorola | 15+ |
Nokia | 15+ |
Source: Retrevo, May 2011 |
Retrevo's Technology Life Cycle analysis engine looked at smartphones from
March 2010 to March 2011and found that smartphones increased in power and added new features that moved many of last year's phones one phase over from new to mainstream. At the current rate,
expect to see new smartphones with higher resolution displays, faster processors, and other new features displace the current phones by this time next year.
Emerging Technology Life Cycle Analysis for Smartphones |
March 2010 | March 2011 |
5 MP Camera | 8 MP Camera |
Single-core processor | Dual-core processor |
Standard Definition Video | 720/1080 Video |
3.5g | 4G |
| Front Camera |
| HDMI |
Source: Retrevo, May 2011 |
Carriers have valid business reasons for sticking with
a two year contract. Phone buyers, however, wonder if a shorter contract would be more in sync with the pace of new smartphone technology, beggings the question, "would consumers pay more for a
one year contract?"
When smartphone owners were asked if they would be willing to pay extra for a shorter contract, most buyers would not. However some owners would pay extra and $100
seems like the most popular price point.
- 66% would not pay more
- 19% would, up to $100
- 4% would, up to 200
Little definitive information was found with
regard to carriers offering upgrades to a phone before the contract is up. Some findings include:
- Verizon recently scrapped their New Every Two program and currently does not offer
any early upgrades before 20 months
- AT&T offers a discount after 20 months but that is practically 2 years
- Any Sprint customer paying more than $89.99 for a contract can get a
fully discounted new phone after one year along with a contract extension
Retrevo reports that data for this report came from a study conducted online recently with
over 500 users responding, distributed across gender, age, and location in the United States. Responses were weighted based on reported demographics to gain accurate estimations of gadget ownership
and usage within and across demographics. All data is therefore reported as weighted data in which most responses have a confidence interval of +/- 4% at a 95% confidence level.
For additional information from Retrevo, please visit here.