The era where cell phone companies offered phone subsidies as trade for a customer's long term commitment has ended. The impact this is having and will continue to have on smartphone sales is profound. It is much more likely that customers will upgrade their devices less frequently. We are already beginning to see the impact in Apple and Samsung earnings.
I don't really buy that. Can you point to any evidence people are updating devices less frequently? Apple sold more iPhones in Q1 of 2016 then they did in Q1 of 2015 so are you extrapolating from a single down quarter?
This report[0] (from 2014, but the trends cited seem to have continued from other places) have cited the end of 2-year upgrade incentives (or rather, cheaper monthly fees after 2 years) as a primary reason for a drop in cellphone sales.
In particular, in 2013 40% of respondants would upgrade phones after 2 years... in 2014 that number dropped to 15%.
At the same time, the number of people who said they would upgrade at "obsolesence" went from 15% to 35%.
There's a decent amount of evidence that 2-year contracts trigger a lot of phone upgrading. The end of that whole cycle is going to continue to cause pain to anyone selling cells.
I personally did not upgrade from the 4s because the subsidy ended. Relatively the iPhone 6 vs 5 was an unusually big jump for Apple which confuses the issue.
Woosh. Sure, and the laws of supply and demand change when your talking about a phone. Cost up, demand down.
The point was in most peoples minds the iPhone 4 vs 5 jump was smaller than the 5 vs 6. And the 5 needed a new connector. So, we are stuck with an apples to apples to oranges comparison.
Samsung sales also dropped that's significant and they lack a stark A vs B model year comparison due to massive numbers of phones being regularly released. http://www.gsmarena.com/samsung-phones-9.php
