Topic overview
In brief
- Consumers are keeping smartphones longer due to rising prices and incremental improvements.
- Smartphone manufacturers are exploring leasing and subscription models to retain customers.
- The shift towards these models is expected to continue, but outright ownership will remain relevant.
Summary
In the United States, smartphone ownership is undergoing a significant transformation as consumers are increasingly opting for leasing and subscription models instead of outright purchases. This shift is driven by rising smartphone prices and the increasing longevity of devices, with many users keeping their smartphones for longer periods. Analyst firm Counterpoint Research predicts that the average global replacement cycle will extend to four years by 2026, up from 3.5 years in 2025. This trend is particularly evident among premium smartphone owners, who now retain their devices for an average of 42 months, compared to 38 to 40 months in previous years, according to market intelligence firm IDC.
As a result of these changing consumer behaviors, smartphone manufacturers are experimenting with various ownership models, including leasing, subscriptions, and guaranteed buyback programs. These initiatives aim to create a sustainable used and refurbished market by ensuring that devices are consistently cycled back into the market. However, the challenge for the industry lies in convincing consumers that these new models are financially advantageous compared to traditional outright purchases. For those who frequently upgrade their devices, it may be more cost-effective to buy outright rather than subscribe or lease.