Goodbye, $1000+ Phones: Buyers No Longer Willing to Throw Money Down the Drain

While smartphones are getting more and more expensive with every new generation, the number of customers willing to spend an insane amount of money on such a device is also dropping.

This is the conclusion of a study conducted by NPD Group in the United States, a market where the iPhone 11 Pro, which starts at $999 for the base version, is still selling well.

But NPD says under 10% of consumers are spending more than $1,000 on a smartphone, and this raises particular concerns ahead of the 5G iPhone launch next year.

Research shows consumers in New York and Los Angeles are the ones most likely to purchase a device whose price surpasses the $1,000 milestone, but other than that, potential buyers are looking for more affordable devices overall.

“Consumers are holding onto their smartphones for longer periods, which has presented a challenge for the smartphone market,” said Brad Akyuz, executive director, industry analyst, NPD Connected Intelligence. “Manufacturers and carriers are expecting 5G to help reinvigorate the upgrade cycle, but pricing could present another hurdle.”

5G iPhones launching next year

The data also shows a substantial difference between purchase intent and the actual acquisition of a new smartphone. Not a long time ago, new-generation iPhones reached record purchase intent levels, but now this survey shows that, in fact, there’s a chance that only a few of those who want to buy an expensive device actually afford it.

“Overall awareness and purchase intent reported by consumers is high, but only a small segment of the market can afford these $1,000+ devices,” added Akyuz. “This provides an opportunity for both carriers and manufacturers to focus on diversifying their 5G portfolios by introducing more affordable mid-tier 5G models to enjoy faster adoption rates.”

2020 is expected to be the year of 5G, as most major device manufacturers will launch smartphones with such capabilities. All iPhones seeing daylight next year are likely to support 5G speeds, according to people familiar with Apple’s plans.