Unsurprising: The End Of Subsidized Smartphones Means U.S. Smartphone Sales Are Down

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Unsurprising: The End Of Subsidized Smartphones Means U.S. Smartphone Sales Are Down

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Do you have a smartphone? Do you like your smartphone and want to keep it going as long as possible? Now that U.S. carriers have quit giving us new free phones every 18 months to two years, smartphone users here have come to realize that the devices do not, in fact, cost $0-$200, and maybe we should keep using them for longer. Some recent sales data shows that smartphone sales are down here, and it’s not hard to figure out why.

T-Mobile was the first carrier to get rid of subsidies, forcing customers to either pay up front, bring their own devices, or pay in installments beginning in 2013. It has worked out better for them than we predicted at the time, and other carriers soon adopted similar policies and installment plans.

Those plans were first pushed aggressively about 18 months to two years ago, and it that’s why it’s not really surprising that U.S. phone sales are now falling below the global average, according to a new report from reserach firm GfK. The company’s director of trends and forecasting explained to TWICE that we’re a “mature” phone market where demand has stayed pretty steady.

More importantly, carriers are giving us an incentive to hold on to our phones for as long as possible, offering lower monthly fees to unsubsidized customers even before ending subsidies. In an environment where unlocked phones are widely available and users aren’t locked in 2-year contracts, carriers will have to compete on price, and once someone has a low monthly bill, they don’t necessarily want to give that up to get a new gadget.

Why North American Smartphone Growth Is Slowing [TWICE]

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  1. MissPurdy says:

    Someone from the old consumerist commenting system recommended Ting and I’ve been with them ever since. I bought out the remainder of my contract with Sprint at the time, bought a Samsung S2 from Ting and am still using the same phone. I believe it will be 4 years old in July and still works like a champ. My average bill for 2 phones with Ting varies between $55 and $75 a month. With Sprint I was paying a fixed $150 a month and locked into a 2 year contract with no phone upgrade until contract renewal.

    I cannot praise Ting enough and thanks Consumerist for being the site where I found out about them.