Getting a new phone..? nah!

Discussion in 'Headline News' started by RickAgresta, Mar 1, 2018.

  1. RickAgresta

    RickAgresta Peanut, leader of the Peanutty Forces

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    Your Love of Your Old Smartphone Is a Problem for Apple and Samsung
    Some shoppers are balking at new-phone price tags pushing $1,000 or features that don’t impress

    The smartphone industry has a culprit to blame for slumping sales: Its old devices remain too popular.

    Flashy phones of yesteryear, particularly Apple Inc.’s AAPL -0.15% iPhones and Samsung Electronics Co.’s Galaxy S handsets, are getting refurbished, and U.S. consumers are snapping them up. Many shoppers are balking at price tags for new phones pushing $1,000, and improvements on latest launches in many cases haven’t impressed.

    As more people hold on to devices longer, new smartphone shipments plunged to historic lows at the end of 2017.

    “Smartphones now resemble the car industry very closely,” said Sean Cleland, director of mobile at B-Stock Solutions Inc., the world’s largest platform for trade-in and overstock phones, based in Redwood City, Calif. “I still want to drive a Mercedes, but I’ll wait a couple of years to buy the older model. Same mentality.”

    Another trend borrowed from the car industry that has helped consumers get around sticker shock: leasing. Instead of buying new phones, Sprint Corp. and T-Mobile US Inc.allow subscribers to effectively lease them, allowing them to trade up for the latest device. That option, though, hasn’t yet gone mainstream.

    Refurbished phones represent the fastest-growing segment of the global smartphone industry, accounting for nearly one out of every 10 devices sold, according to Counterpoint Technology Market Research, which tracks device sales. Overall smartphone shipments hit 1.6 billion last year, Counterpoint says.

    These older phones, which can sell for several hundred dollars, sap some of the demand for brand-new devices, which deliver the biggest profits. A premium handset today is likely to have three, if not four, different owners before it eventually gets tossed, according to industry executives and re-sellers.

    Second-hand phones long found their way to Africa, India and other developing markets. But now, U.S. buyers represent 93% of the purchases made at second-hand phone online auctions run by B-Stock, compared with an about-even split between the U.S. and the rest of the world in 2013.

    Samsung and Apple together sell more than one out of every three phones globally and capture about 95% of the industry’s profits.

    U.S. consumers, spurred by two-year carrier contracts and phone subsidies, were upgrading every 23 months as recently as 2014, according to BayStreet Research LLC, which tracks device sales. Now, people are holding onto their phones for an extra eight months. By next year, the time gap is estimated to widen to 33 months, BayStreet says.

    Device makers don’t lose out completely when older phones pass through several hands: For Apple, more iPhone users from the price-conscious crowd translates into more revenue for its fast-growing services arm, including the App Store and its music and payment services.

    Apple has faced U.S. and European government investigations in recent months over the slowed performance of older iPhones. The company has repeatedly said it would never intentionally shorten battery life or degrade their devices’ user experience. It has since slashed replacement-battery prices.

    Apple Chief Executive Tim Cook, during an earnings call on Feb. 1, said the secondary market has expanded in recent years and that the iPhone’s reliability has generally been “fantastic.”

    In a recent interview, D.J. Koh, Samsung’s mobile chief, said the growing popularity of second-hand phones has Samsung rethinking whether to adjust its broad portfolio strategy. Though nothing has been decided, Samsung in certain markets is weighing whether to push refurbished flagship devices more aggressively over new releases of lower-cost phones, Mr. Koh said.

    A quarter of U.S. consumers sold their smartphones after upgrading to a new device in 2017, the highest rate in the world, according to Deloitte.

    That has created ample supply for consumers like Alan Earl, a 40-year-old digital marketer from Phoenix. He recently bought himself a refurbished iPhone 6S for $350, even though he gets new iPhones for his two children and wife when they are due for upgrades. He didn’t care for the iPhone X’s edge-to-edge display and wasn’t interested in its facial recognition features.

    Mr. Earl said he just needs his phone to text, call, check social media and listen to music. “I don’t feel like I’m missing out,” he said. “I don’t need any more phone than what I got.”

    Steep prices for new phones are a significant reason for the refurbished industry’s growth, said Remon Gazal, chief commercial officer at wireless distributor Brightstar Corp., which specializes in trade-in distribution. “Now, my phone costs more than my laptop,” Mr. Gazal said.

    Smartphones had roaring double-digit growth until the past two years. In 2017, new smartphone shipments rose just 2.7%, according to Gartner Inc., a market researcher. In the final three months, shipments declined for the first time in the industry’s history.

    Phone makers had banked they could compensate for slowing volume by pushing up prices. But customers balked.

    “It’s the worst case scenario now,” said CK Lu, a Gartner research director. “Now the phones are maybe too expensive.”

    Link to the complete article:
    https://www.wsj.com/articles/your-l...is-a-problem-for-apple-and-samsung-1519822801
     
  2. Hook

    Hook Phone Killer ;-) Arrrrr...f

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    Keeping with the car analogy, Samsung and Apple should create a "Certified" refurb option and offer trade-in credit against new devices. That could also allow them the control to promise security updates on factory certified refurbs. That's of course the one aspect of older phones which isn't discussed, security updates for older devices. Apple should be smelling like a rose in this discussion, but after all the slow-down uproar, they are left with no bragging rights on this.
     
  3. headcronie

    headcronie Greyscale. Nuff Said. Super Moderator

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    My wife's iPhone 6 has been hit by the slowdown kerfluffle. To say that it is annoying, is an understatement. It is dang near a safety issue. Her phone dialer app will just sit and not complete a call. You may have to attempt it 3 times for a call to complete. Mapping software sits and spins, never loads. You can reboot the phone to your hearts content, and there won't be any improvements. I've freed up space on it, just to make sure.

    And... we don't have an Apple store within 80+ miles of us. Did I mention her job has her on call 24/7. If she brings home a new iCrap, I may lose my mind... *sigh*
     
  4. jigwashere

    jigwashere Life is a circus!

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    But, with the slowdown, at least it might not explode. ;)
     
  5. headcronie

    headcronie Greyscale. Nuff Said. Super Moderator

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    It is a case of explosion transference. The phone does not explode. Mr. HC explodes.

    I'd rather have the phone explode... ;)
     
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  6. z22 2006 User

    z22 2006 User BHOT's Own Fluffy

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    I was planning on keeping my S7 indefinitely until it dies, but the home key starting to chip has me worried about its longetivity. Even then, I got two phones for the price of one when buying it, and I'd just buy from Swappa if I had to change phones.
     
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  7. RickAgresta

    RickAgresta Peanut, leader of the Peanutty Forces

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    hope your phone hangs in for you, Z. hoping to do something similar with my 2.5 year old S5.
     
  8. EdmundDantes

    EdmundDantes Mobile Deity

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    I've thought this for some time.

    Rick, what's the deal with your font or text size? It's huge.
     
  9. RickAgresta

    RickAgresta Peanut, leader of the Peanutty Forces

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    uh, Edmund? in this thread (I assume that's where your font/text size question is directed), all the posts look the same (meaning, yours, mine, headcronie, jig, Hook, z22), both on my phone and on FF portable@work. :vbconfused:
    testing built-in font sizes below, it looks like '4' is the default size. it's possible that the article has a different size, since that, iirc, was posted from my phone, and I wouldn't be surprised if something slipped by...
    1 portable
    2 portable
    3 portable
    4 portable
    5 portable
    Arial
    Book Antiqua
    .Courier New
    .Georgia
    .Tahoma
    .Times New Roman
    .Trebuchet MS
    .Verdana
     
    Last edited: Mar 6, 2018
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  10. EdmundDantes

    EdmundDantes Mobile Deity

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    On my screen, only your top post looked different than the others and it still does.
     
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