Press release:

The price isn’t right: Handset apathy sets in as consumers prioritise higher performance and lower prices

  • Four in five Brits (80%) think smartphones are too expensive[1], with just a fifth (20%) planning to upgrade this year[2]
  • Two in five (38%) cannot tell the difference between makes and models[3] as familiar designs fail to cut through with consumers
  • Nearly three quarters of phone users (71%) are happy to choose an older model, saying newer versions are expensive with comparable performance[4]
  • Just a quarter (27%) believe their existing handset will soon be out of date[5]
  • Battery life, price and camera quality are the most important factors, with fewer than one in ten people caring about the latest tech such as 5G capability or wireless charging[6]
  • Challenger brands, with comparable performance but more attractive price points, set to threaten Apple and Samsung’s duopoly, with only around half of people (53%) planning to stick with ‘Big Two’[7].

The latest advances in smartphone technology are not convincing consumers to upgrade to the newest models as the industry struggles to combat handset apathy, according to new research from uSwitch.com, the price comparison and switching service.

 

The vast majority of people (80%) think smartphones are too expensive[1] as handset sales in the UK continue to decline[8]. Only a fifth of consumers (20%) plan to upgrade their handsets this year[2].

 

This is despite there now being a greater variety of phones to choose from and fewer users bound to their current handset. In fact, more than half of all smartphone customers in the UK are on either SIM-only or pay-as-you-go deals[9], meaning they are free to change phone whenever they choose – but three in five (58%) of these have no plans to do so in 2019[10].

 

The uSwitch findings suggest that the industry is out of step with its customers. Only a quarter of people (27%) believe their phone will soon fall out of date, so the perception is that there is less need to upgrade to the latest model[5]. However, with 5G handsets already being introduced into the market, this could be a misplaced belief.

 

Price remains the ultimate driver, with almost three quarters of customers (71%) happy not to choose the latest handset as previous models are cheaper and the performance is comparable[4].

 

In addition, new designs are not having the desired impact on consumers, with two in five (38%) saying they cannot tell the difference between makes and models[3] – a reflection that handsets have become increasingly comparable both in their appearance and performance.

 

Upgrades in technology and new features on the most recent handsets – such as wireless charging, foldable screens and 5G capability – are also failing to cut through, with consumers continuing to favour battery life, price and camera quality.

 

Ultimately, it is the longstanding ‘Big Two’ of Apple and Samsung who could be most affected, with a swathe of challenger brands – spearheaded by the likes of Xiaomi and Oppo – ready to take advantage. While Apple and Samsung currently retain their duopoly in the UK market, only half of people (53%) plan to stick with those two providers[7], with other cheaper brands offering many of the key smartphone features at more competitive prices.

 

Table: priorities for consumers when choosing a new phone[6]

 

Ru Bhikha, mobiles expert at uSwitch.com, says: “These findings should ring alarm bells within the mobile industry, as they highlight a growing disconnect between the way phones are devised and marketed, compared with how consumers buy them.

“People are changing phones less frequently, in part because handsets are already doing everything required of them, while of those planning to change phones this year the majority won’t be buying the latest model available. Given this is the much heralded year of 5G, consumers risk being left with an outdated phone just months after upgrading.

“The latest smartphones now can set consumers back more than £1,000 SIM-free, and once you add the potential increases in 5G tariff pricing, this could create a further deterrent to those who already feel that phone contracts are too expensive.

“With those surveyed suggesting cost matters more than new features such as foldable displays – which are coming to great industry fanfare – the existing smartphone market looks set for further disruption in the near future. Newer challenger brands are offering handsets with everything consumers say is important to them – excellent battery life, great cameras and plentiful storage – but crucially are doing so at far more attractive prices.

“Our brand loyalty to Apple and Samsung has seen UK consumers lag behind our European cousins when it comes to challenger brands such as Huawei and Xiaomi, who have already obtained an established following in the EU. The good news – although potentially bad  for the duopoly – is that there is no shortage of affordable, quality smartphones on the market – and as awareness of appealing alternatives grows, people will continue to vote with their feet and wallets.”

Find out how you could save over £1,000 a year with uSwitch here.

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Notes to editors

Notes to editors

Opinium surveyed a sample of 2,003 UK adults from the 5th to 8th April 2019. Results have been weighted to reflect a nationally representative criteria.

  1. Respondents were asked ‘How much do you agree with the following statement: phones are too expensive’ A net total of 80% said they agreed
  2. Respondents were asked ‘Do you plan on upgrading your phone this year?’ 20% responded ‘Yes’
  3. Respondents were asked ‘How much do you agree with the following statement: I cannot tell the difference between the different makes and models of phone’ A net total of 38% said they agreed
  4. Respondents were asked ‘How much do you agree with the following statement: When changing phone, I am happy not to choose the very latest model as the latest model is expensive and the performance is comparable’ A net total of 71% said they agreed
  5. Respondents were asked ‘How much do you agree with the following statement: My current phone will soon be technologically out of date and in need of changing’ A net total of 27% said they agreed
  6. Respondents were asked ‘When upgrading your phone, what are your top three features which are important in your decision making process?  Please select a maximum of three’
    50% selected ‘Long battery life’
    49% selected ‘Best price’
    30% selected ‘Good camera’
    23% selected ‘Large storage capacity’
    21% selected ‘Brand
    16% selected ‘Processor speed’
    16% selected ‘Fast charging’
    16% selected ‘Larger screen size’
    8% selected ‘Design/colour’
    8% selected ‘Damage resistance’
    6% selected ‘5G capabilities’
    5% selected ‘Wireless charging’
    4% selected ‘Headphone jack’
    3% selected ‘Dual SIM card’
    3% selected ‘OLED display’
    1% selected ‘Foldable screen’
    9% selected ‘None of these’
  7. Respondents were asked ‘What make of phone do you think your next handset will be?’ 28% said Apple, 25% said Samsung
  8. UK smartphone shipments fell 14% in Q4 of 2018 (telecoms.com)
  9. Respondents were asked ‘What kind of phone contract are you on?’
    17% answered ‘SIM-only contract (airtime only)’
    15% answered ‘SIM-only monthly rolling contract (airtime only)’
    20% answered ‘I am not on a contract (pay-as-you-go customer)’
  10. Respondents were asked ‘Do you plan on upgrading your phone this year?’ Of those on SIM-only or pay-as-you-go deals (1031 respondents), 593 responded ‘No’. 593/1031 is 57.5%.

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