As smartphone prices increase, with seemingly minor feature changes, customers are holding on to their phones for longer before replacing them. The iPhone XR/XS line costs anywhere from $749 to $1,349, and the Samsung Galaxy S10 line ranges from $749.99 to $1,299.99.
“Each iteration of a new phone, the changes are smaller than they used to be, so people don’t feel pressured to buy a new phone as quickly as they once were,” said eMarketer principal analyst Yoram Wurmser.
“The change, for example, between an iPhone 3G to an iPhone 4 was a big jump," he said. "The jump now between the iPhone X and the iPhone XS is pretty minor. People just don’t feel compelled to buy those phones every year-and-a-half; they’re waiting three years."
On top of increasing phone prices, there are competing devices that people are interested in spending money on: smart speakers, smartwatches and other personal and home accessories. Smart speakers, for example, are quickly being adopted by consumers after being widely available to the public. Research from IDC and Morgan Stanley estimates that US smart speaker penetration will reach 40% at the end of 2019.