Are You Spending More on Smartphone Hardware or Software?

10 Comments

Quick: How much did you spend on smartphone applications last year? We’re halfway through tax season here in the U.S., so I have this info at the tip of my fingertips right now. I actually didn’t spend much: under $20 in 2008. I tend to use free apps when I can on my phone and I generally use a netbook for heavier lifting.

ABI Research recently took a very small sample of people who installed apps on their smartphones last year and queried them as to their total expense. Out of the 235 respondents, nearly 17% reported an expense between $100 and $499, which shocked me for two reasons.

First, I’d think that the many 99-cent applications for Apple’s (s AAPL) platform would offset higher-costing software on other operating systems. Second, some of these folks could actually be spending more on software than their hardware cost them. I’ve bought plenty of smartphone software over the past half dozen years, but I don’t think I ever spent more than the hardware cost me. Perhaps I’m in the minority?

Have at it in the below poll, in which I break the expense brackets down in a more granular and lower level, as my guess is that most folks spent under $200 on smartphone software in 2008.

With all of the “app store” models, however, this has me thinking. Is the smartphone market making a bigger move towards the “Gillette” business model? Gillette, of course, famously makes relatively inexpensive razors, but makes money hand-over-fist on relatively expensive replacement razor blades.

[polldaddy poll=1395517]

10 Comments

CSMR

To be spending more on software than hardware at the i-phone level you have to be spending more than $500, which is huge… not many people do. I think over $200 is a lot too.

Adam O

Like many of jkontherun’s readers I have a fair few gadgets in active use:

– iPod Touch
– Blackberry Bold
– iPaq 210
– Lifedrive
– Psion 5mx

I regularly purchase software for all (well not so much for the Psion these days!), Handango and the App store have made life easy and as I see it the hardware is just the basis for the software. If I want an improved UI, better functionality etc I buy software apps….if the software I want is only available on another hardware device I buy the hardware for the software.

I think I probably average $50 – $70 a month on mobile device software, I don’t continue using all of it but the good apps stay.

HSK

Every time I buy a new platform, I buy some amount of software for it. Probably only $75-$100 worth. Then I typically don’t buy any again – until I get a new phone! I agree with one of the above posts about the Apple app store – it is a game changer for apps.

Woadan

Honestly, I don’t typically use an app if I have to but it. But I also don’t typically find that I use an app for long enough to justify spending money for it.

Woadan

Wevenhuis

I would choose the free aps as much as possible. Although the apps that you have to pay for seem more functional and better feature packed. For now I think the $50-75 mark will be accurate although sofware will more likely to dominate in the future as phone hardware are likely to hit a common threshold. Even now consumers are wishing for a combined features from different OS’es.

Tom Reestman

Interesting question. I’m in the $50-75 club, though I’m counting a couple of $10 games for my daughter’s iPod touch that are also on my iPhone because, what the heck, they’re paid for.

Bill

I only use freeware apps on my Windows Mobile phone. No need to buy any with the many free apps that are available.

lecter

I think it depends a lot on the platform and the ready availability of software…I think the App Store makes a lot more people aware of available software for their smartphone, as opposed to, say, the average Symbian user, who is barely aware that his new Nokia even IS a smartphone and uses only the bundled apps.

I’ve also seen very few Blackberry users who install more than what’s on the phone already…it’s all about perception, everyone who has an iPhone is bragging about its cool features and thus raising awareness of apps among others, while most people who use corporate smartphones will rarely give a second thought to installing extra software on it.

P.S. I don’t know if this happened to more people or not, but I thought the poll question was about smartphone hardware expenditure in the past year…I guess the granularity of the prices should have tipped me off, but still, maybe a more obvious title for us people who are quick on the trigger? :)

Scott

Are you counting subscriptions like to Telenav for GPS on Blackberry? I just canceled that on my phone but it was $10 a month last year.

Kevin C. Tofel

Good question and I’m not sure how ABI handled that. For our purposes, let’s leave that out as it could equally be a service and not just software. :)

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