Just under 10 percent of US consumers are willing to spend over $ 1,000 on smartphone purchases, according to new market data.
The findings come from research firm NPD Group, which has been tracking what smartphones US consumers have been using over the past year. “Overall awareness and purchase intent reported by consumers is high, but only a small segment of the market can afford these $ 1,000+ devices,” NPD executive director Brad Akyuz said in a research note.
The findings will probably surprise no one. After all, who really wants to spend that much on a phone? It was only five years ago when the starting price for the latest flagship handsets was at $ 649. But since then, costs have dramatically increased to $ 1,000 or more while the pace of innovation has slowed.
Research firms have now been reporting most US consumers are now refraining from upgrading. Instead, they can end up keeping their existing devices for about 2.75 years, or 75 percent longer than they did back in 2014. Meanwhile, a separate poll recently found that only about 16 percent of Americans would be willing to pay between $ 751 to $ 1,000 for a phone.
According to NPD Group, US consumers who do buy a $ 1000+ phone tend to come from the biggest cities in the country, including New York City and Los Angeles. However, the industry is hoping smartphone sales will see an overall boost in 2020 as the US market rolls out more 5G networks across the country.
To take advantage of the networks, you’ll need to buy a 5G-enabled smartphone. As a result, it’s possible we could see a wave of US consumers opting to upgrade. But NPD Group isn’t so sure. That’s because the same 5G-enabled smartphones will likely be flagship devices with price tags around $ 1,200. “Manufacturers and carriers are expecting 5G to help reinvigorate the upgrade cycle, but pricing could present another hurdle,” Akyuz added.
To reinvigorate sales, NPD Group recommends smartphone vendors focus on creating more affordable models.