Consumers Upgrade Phones Less Often; Will Apple Be Able To Break The Trend?


As consumers buy higher-end mobile phones that are capable of doing more and cost more, they might find less reasons to upgrade their devices as often. Qualcomm (NSDQ: QCOM) CEO Paul Jacobs said today in an interview with CNBC that his company is seeing some signs that customers are slower to upgrade their mobile phones than before, Reuters reports. Jacobs: “We’re seeing some evidence there’s a lengthening of replacement cycles.” The trend is more apparent in developed markets, such as Japan and South Korea, where clearly devices have been more advanced for longer. Depending on the region, Jacobs said consumers tend to keep the same phone for a year to two before replacing.

The one company that will likely break this trend is Apple (NSDQ: AAPL). Last year, it launched the 2G iPhone. About 13 months later, iPhone users and new customers lined up to buy a device at a lower price that offered more storage and faster network speeds. It’s the iPod strategy all over again. From here, iPhones will predictably get smaller and cheaper, while at the same time offering incrementally larger hard drives and spiffier features. Might as well get in line now.

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