More and more consumers are waking up to the savings on offer with SIM-only smartphone contracts, in the first sign that cost concerns may finally be trumping the desire to own the latest must-have gadgets.
According to a CCS Insight survey, UK mobile phone sales are set to fall by 11% in 2014, after a year-on-year slide of 20% in the first quarter.
It’s claimed that this, coupled with a 14% annual dip in tablet sales, represents the “first time such a sharp decline has been recorded in the vibrant UK market outside a recession”.
The downturn in new smartphone sales is attributed partly to networks’ attractive SIM only deals that allow customers to sign up for monthly allowances while retaining their existing handset. This has allowed Britons to help offset soaring living costs, led by skyrocketing energy charges.
SIM only deals are typically more flexible too and operate on a rolling-contract basis that entitles customers able to leave whenever they like with a month’s notice.
CCS also claims manufacturers are to blame for tapering demand for failing to innovate and give consumers a compelling reason to pay extra to get the latest smartphone when their two-year contract expires.
The good news for Britons is that one consequence of the slowdown, which comes despite the commercial fillip that 4G was expected to bring, is that electronics companies will likely "step up their marketing efforts and spoil buyers with a wealth of attractive promotions and bundles” in months to come.
However, don't expect Apple, demand for whose products only ever seems to rise, to chase buyers with sweeteners. CCS forecasts huge sales for the next-generation handset when it arrives in September, whether it’s a significant step forwards or not.
Details of what Apple’s forthcoming smartphone will offer remain under wraps.
Rumours suggest it will be available in two iterations, with the gadget-maker finally bowing to consumer demand for larger screens with devices featuring a choice of a 4.7-inch or 5.5-inch display.