Americans spent $5 billion upgrading iPhones in 2013
Many moved to new phones that were only slightly better than the ones they already owned.
The average iPhone upgrade costs $151 every two years, which works out to $5.4 billion in upgrades every year, according to the study by SellCell.com, a site that aggregates deals from more than 20 trade-in companies.
“We're a nation of mobile-phone lovers -- obsessed with getting a shiny new device,” says Craig Timmins, spokesman for SellCell.com. Apple (AAPL) accounts for 41% of the U.S. smartphone market, according to market research firm ComScore, and iPhone owners pay more than the average price to upgrade ($130).
In fact, Americans spend over $11 billion upgrading all types of smartphones annually, and nearly one in four U.S. adults (23%) upgrades his or her phone each year.
Why do phones upgrade so often, beyond just because there are incentives built into the contracts? Americans appear to have an emotional relationship with their phones, according to a recent study by the Pew Internet & American Life Project.
Indeed, that study found that 44% of smartphone owners -- 56% of the U.S. population -- have slept with their phone next to their bed. (Among the reasons people give for keeping this digital bedfellow: To make sure they don’t miss any calls, text messages or other updates during the night.) Nearly 30% of cell owners describe their cell phone as “something they can’t imagine living without,” and 67% say they check their phone for messages, alerts or calls without it even ringing or vibrating.
Upgrading to a new phone has also become easier. A quarter of those surveyed said early upgrade programs from Verizon Edge, T-Mobile Jump and AT&T Next will make them more likely to upgrade sooner, Timmins says. Verizon Edge, which launched in July, provides a payment plan that spreads the retail price of a phone over two years; customers can also upgrade to a new phone after six months if 50% of the retail cost has already been paid.
AT&T Next also allows customers to choose a new smartphone every 12 or 18 months on an instalment plan with no financing fee.
Trading in used phones has become a global business, thanks in a large part to the supply of Apple’s iPhone and the global demand overseas for the product. Consumers can trade in their old Verizon 16-gigabyte iPhone 4S for $110 and iPhone 5 for $280 on resale site Gazelle.com in “flawless” condition, and Nextworth will pay $99 for the Verizon 16-gigabyte iPhone 4S. In fact, iPhone trade-ins are up 74% so far this year over the same period last year, while Samsung trade-ins are up 114% so far this year compared with last year, according to Gazelle.com.
And they keep coming: Since 2007, Apple has sold seven separate iPhones -- the original, 3G, 3GS, 4, 4S, 5, 5s and the multi-colored plastic 5c. By 2017, Apple will have a 90% penetration rate and 68% of the U.S. smartphone market, according to new statistical analysis by market researcher Asymco. The logistical growth of iPhones is almost perfectly parallel to that of the overall smartphone market, the research found. “The reason for this seems to be that consumers are absorbing the product similar to how they are absorbing the technology."
More from MarketWatch
I like the new 5c. but not the way I came by it.
I was perfectly happy with my old iphone 4 - it was years old...but far better than any blackberry I ever had and I'd still have it - IF I hadn't clicked on the upgrade to ios7! (Grrr...)
my 4 lasted 3-4 weeks more...but in the end, it just couldn't function anymore with the upgraded software. I actually got the 5c FREE though....I got $120 for my 4 at Best Buy...and the 5c only cost me $99. Even after taxes I left with a gift card. lol.
(why was my 4 worth so much? PRISTINE was what it was called. I'd never had it out of my case...and I immediately got on the Lifeproof website and ordered the "free" lifeproof for my 5c. It will also be perfect years from now. With any luck, I won't have to upgrade for years to come.
now take the status part out these phones are nice but have limited abilities.. and who wants that..
Look, lucky me I have a iphone 4 for work and a Samsung 3s for home...
The thing is there is things that I like about each of them, but neither is ideal.
I also totally dislike the last iphone update. it makes it harder to use than easier..
People, you will be better off buying a Nokia 520 for just $59, than $600 on a iPhone.
Heck you don't even need a cell plan, just get a $3/month US subscription on Skype and you can call unlimited over wifi.
Anytime I see an iPhone it just looks like a child's toy.
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
[BRIEFING.COM] Equity indices closed out the month of August on a modestly higher note. The Russell 2000 (+0.6%) and Nasdaq Composite (+0.5%) finished ahead of the S&P 500 (+0.3%), which extended its August gain to 3.8%. Blue chips lagged with the Dow Jones Industrial Average (+0.1%) spending the bulk of the session in the red.
The final week of August represented one of the quietest stretches for the stock market so far this year. The first four sessions of the week produced the ... More
More Market News
|There’s a problem getting this information right now. Please try again later.|
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'