Smartphone trends affecting the product lifecycle
The mobile phone market has evolved significantly over the years. A mobile phone from 2002 or even 2010 pales in comparison to the newest smartphones. From phone buying (payment structures, service contracts) to usage (photos, music streaming, storage needs, how long a device is kept) — almost everything has changed. Not only has smartphone financing evolved from an outright purchase to a monthly payment structure, the phones themselves have evolved quickly. The latest models boast larger screens, longer battery life and powerful cameras, but all the new technology has driven up retail prices, creating a larger financial hit when it comes to depreciation. As a result, consumers are tend to wait longer to upgrade these days.
The Average Selling Price (ASP) of smartphones is increasing (and continues to increase):
According to IDC, the average selling price of smartphones in North America increased by 6.78% from 2013 to 2017.
- Some models depreciate more than others: A Decluttr study showed that Apple models lost an average of 57% of their value within the first year. Samsung and HTC smartphones lost 72% of their value and LG phones lost 75% after a single year. After two years, most phones have lost 80% or more of their value.
- The lifespan of smartphones is increasing: Since people are keeping their smartphones longer (higher prices, updated models not deemed significant enough, etc.), the period of time between upgrades has increased. By 2019, global projections for IDC and Morgan Stanley show that the average time between upgrades of smartphones will be 2.75 years (over 33 months) by 2019.
Katie WildKatie Wild is the Executive Director of Global Marketing at Ingram Micro Commerce & Lifecycle Services heading up the Product Marketing & Demand Generation teams. She is focused on comprehensive go-to-market strategies. She is a self-proclaimed logistics nerd. Prior to Ingram Micro, Katie spent a number of years in logistics, as well as, healthcare.