To upgrade or not to upgrade? Smartphone upgrade offers have traditionally been key to the market and can be more affordable than buying a new phone outright. But with alternative options cropping up, such as Apple’s iPhone Upgrade program, are people less inclined to upgrade through their carriers?
While there are various ways people purchase phones, data from Q3 of 2018 shows that the majority of U.S. adults purchased their most recent smartphones from a phone carrier, and more than one-third were financing their phones through their carrier. New data from CivicScience show that out of 1,854 U.S. adults surveyed, a total of 40% participated in an upgrade plan offered by their phone carrier within the last three years.
Even so, the survey shows that the majority of adults who participate in carrier offers aren’t upgrading to new phones all that frequently. Most only upgraded once in three years, while 20% upgraded their phones twice, and a slim margin upgraded three or more times.
Regardless of how it was purchased, three years seems to be the tap-out point for a smartphone’s life cycle. The survey shows that among smartphone owners (CivicScience tracking shows that 15% of U.S. adults don’t own smartphones), about 70% said they’ve owned their current smartphone three years or less, while 21% have somehow managed to hang onto their current phone for more than three years.
Smartphone Type Plays a Role in Upgrading
The survey also reveals differences among upgrade frequency and type of smartphone. The iPhone is the overwhelming phone of choice among people who have upgraded the most in the past three years. That’s followed by the Samsung Galaxy or Galaxy Note.
Most people who have upgraded through their carriers are either iPhone or Samsung Galaxy users. On the other hand, those who haven’t upgraded in the past three years are much more likely to own an LG or other type of phone.
Income relates to how frequently someone upgrades. The survey shows that people who earned less than $50K per year were the least likely to upgrade their phones, while those earning $100K or more were the most likely. At the same time, the younger you are, the more likely you are to upgrade.
Given that iPhones are a leading reason for frequently upgrading through a carrier, and iPhones are beloved among younger Millennials, it’s not surprising to see that interest in Apple’s iPhone Upgrade program skews younger. Nearly one-quarter of 18- to 24-year-olds are interested in the Apple-exclusive program, which allows subscribers to upgrade to a newer iPhone model every year.
Overall, when it comes to carrier upgrades, the ongoing trend is to upgrade to a new smartphone once every three years. Those numbers correspond with other findings that U.S. smartphone users now typically wait three years to replace their devices, attributing the longer wait time to rising prices and lack of incentive to upgrade.
However, that slump might change with time, given that Gen Z and Millennials have greater interest in shelling out for more expensive phones and the greater level of interaction they have with them (such as mobile banking). It will be interesting to see if alternative financing programs will disrupt that market. In addition, the advent of 5G might lead a renewed interest in upgrades. Nearly 30% of U.S. adults surveyed earlier this year are eagerly waiting for their carrier to offer 5G, which could bring with it renewed interest in upgrades to 5G compatible devices.