- In 2012, the majority (54%) said they upgraded to a new device right around two years; 26% said they upgrade under 18 months and only 20% said they waited longer than two years to upgrade.
- In January 2014, we asked the similar question yet only 27% said they upgraded at the two year mark. A huge decline. This could indicate that the contract may not be driving behavior as is did in the past.
- Customers who told us they upgrade under 18 months increased 8 points to 34%.
- The biggest surprise is from the people holding on to their devices. 39% of our panel members said they were upgrading over two years, a 19 point increase over 2012.
- Device makers roll out new phones every six months or more. New flagship phones are unveiled each week, tempting the consumer and business user to buy the shiny toy. Just this week, HTC launched the HTC One M8. Last week, there was non-stop chatter about the Samsung Galaxy S5 hitting the shelves soon. A subset of users are tempted by the newest gadget out there.
- In turn, mobile carriers have rolled out early upgrade plans that allow those customers who want the newest device to get one about every year.
- One of the biggest changes in the market (and the impetus behind early upgrade (i.e., leasing) plans) is the slow move by the carriers to stop subsidizing smartphones. Promotions and free phones are not the norm as they were several years ago. Customers are responding by holding on to their phones a little longer.
Kate Pearce is a Sr. Consultant and Strategist at Compass Intelligence. She has a long tenure in the wireless industry, working in corporate strategy, business planning and product development groups at a major telecom provider for nearly 15 years and as a consultant for two years. If you want to contact Kate, she can be reached at email@example.com.