Smartphone upgrade cycle dramatically slowing, study finds

Consumers are deferring smartphone upgrades. But with bots and more natural voice-control about to sneak into our lives, upgrading a smartphone may become moot.

Will devices like Amazon Echo replace smartphones?

Amazon Echo: The smart home's Trojan horse

Despite a barrage of new handsets launched by phone manufacturers on an annual or half-yearly basis, consumers are drastically curtailing their phone upgrades, new research has found.

And many are now waiting for “phones to die before replacing them,” speculates eMarketer, which has been writing about digital advertising company Fluent’s replacement cycle study.

The reason for the slowdown is said to be a combination of the demise of the two-year phone contract from mobile network operators (MNOs) and a lack of ground-breaking technology exciting consumers.

Those consumers are now waiting two years or longer to upgrade, with almost half (42 percent) dawdling by three years, according to the study. In a Wall Street Journal article about the passing of the two-year wireless contract, Citigroup said the typical upgrade cycle was 24 to 26 months in 2014 and 2013.

Contracts, where the cost of the phone was borne by the MNO and was wrapped into the subscription fee, have ended in favor of smartphone users handing over the full, sticker-shock-inducing value of the phone or financing it.

No reason to upgrade

But it’s perhaps the second reason for slowdown that's the most interesting: a lack of new technology is prompting users to stick with what they’ve got. In other words, the consumer sees no reason to move on.

And that raises the question: could we be seeing the beginning of the end for phones? After all, many people don’t use the devices for calling anymore—with messaging having grabbed day-to-day communications away from the voice call. Indeed, some say messaging may replace call centers as the go-to way to communicate with businesses. Messaging is, in any case, evolving from social use to business conversations, Mary Meeker claims in her Internet Trends report this year.

Is something better than a smartphone on the horizon?

So, is something better than the phone about to come along?

The concept behind Amazon’s Echo, a connected voice-control box, is a contender.

It’s certainly not a mobile device. The object sits in the home, in one location, and can hear a user from across the room bark shopping list orders and other instructions.

Is this where things are headed? Fixed devices recognizing the user. If so, does one actually need a mobile device?

Artificial Intelligence (AI) is Google’s take on the next generation of devices, or whatever they may be called in the future. Sundar Pichai, Google’s chief executive, quoted in a Telegraph interview published last week, says he wants his company to be “post-mobile.”

Contextual conversation may make that happen. Once computers can understand contextual conversation, the world changes.

“Over time, the experience will become much more intuitive, much more natural,” Pichai says in the interview.

Companies have tried going the digital assistant route with Siri-like voice services on smartphones, and they have had moderate levels of success. But once a device acts more like a human, could it be enough to get users to trade up?

Attempts are being made to automate business communications into computerized dialogs and conversations called bots. Clunky now, perhaps, but add machine-learning AI, along with some algorithms, and the conversation could become pretty real sounding—just with a computer not a human. What’s more, it could become useful with big data feeding it.

So, if conversational bots replace voice calls, messaging and even apps, and do that better through collaboration and insightful data, will we need an app-loaded smartphone? You might want to hold off on your next phone purchase. Or maybe you are anyway.

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