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The smartphone upgrade path may be fizzling

Matt Hamblen | Jan. 4, 2016
Buyer fatigue may be setting in with constant feature add-ons of limited value.

"It's clearly getting harder and harder to get people to pay attention to smartphone upgrades from the vendors," said Jack Gold, an analyst at J. Gold Associates. "The features that get added are nice to have perhaps, but not critical enough to make a large number of people with relatively new devices go out and buy a new one, particularly if they haven't finished paying for the old one yet."

Gold noted that a faster processor or speedier charging capability will appeal to the 10% of tech savvy users who must have the latest device, but the vast majority of buyers don't make their choices that way. "Most buyers are pretty happy with what they've got," he said.

In emerging markets, like India, Malaysia and much of Africa, with many first-time smartphone buyers, the focus on features is less important than price, Gold noted.

Apple does the best at attracting customers with upgrades, even if they aren't earthshaking. "Some upgrades matter to consumers, but I am convinced that outside of Apple, it is extremely tough to get consumers to pay for these new features," said Ryan Reith, an IDC analyst.

"Putting money aside, I think that fast and wireless charging will matter to consumers soon," Reith added. "They will come to expect it." Buyers expect to see processor upgrades with new models but consumers, even Apple buyers, "won't pay specifically for CPU."

Reith said Samsung needs to focus on reducing the costs of its flagship Galaxy line, rather than "feeds and speeds," because Android competitors Huawei and Motorola will reduce costs. "Consumers are more likely to pay for nice esthetics than feeds and speeds," he added.

Reith said he's unconvinced that buyers are truly fatigued with feature upgrades, although there's no question that overall smartphone growth is slowing, even with growth in emerging countries, as IDC has shown.

"I'm not sure we're yet at a point where consumers are getting tired of smartphone upgrades. You have to keep in mind that the smartphone is the most personal and most used item that most people own," he said.


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