Inflation is causing many consumers to pass on upgrading to a new cell phone this year, according to a survey conducted by an online personal finance platform.

The survey of more than 210 respondents, using data normalized by age, gender, and income so the sample would reflect U.S. demographics, found that nearly two in three Americans (63%) said they wouldn’t buy a new cell phone this year because of inflation.

“Inflation is certainly a significant factor in driving down smartphone purchases, but it’s important to recognize that consumers are getting smarter about where they allocate their resources,” noted Scott Dylan, founder of NexaTech Ventures, a venture capital firm in Manchester, England.

“With phones lasting longer and more affordable options on the market,” he told TechNewsWorld, “inflation may be accelerating a shift that was already happening — where the days of annual upgrades are becoming a thing of the past.”

Dev Nag, CEO and founder of QueryPal, an enterprise chatbot based in San Francisco, added: “It’s important to note that while inflation may delay purchases for some, smartphones have become essential tools for many people’s personal and professional lives. This necessity may lead some consumers to prioritize phone purchases even in challenging economic times.”

“Additionally,” he told TechNewsWorld, “the trend towards keeping phones longer may accelerate due to economic pressures, potentially impacting the smartphone industry’s traditional upgrade cycles and revenue models.”

Ordinarily, inflation doesn’t affect luxury items, but the iPhone is an exception, asserted Rob Enderle, president and principal analyst at the Enderle Group, an advisory services firm, in Bend, Ore. “iPhones sell into non-wealthy segments,” he told TechNewsWorld. “This should have eroded Apple’s brand image as a luxury brand, but it has not. Inflation has a far bigger impact on middle-class and below buyers than it does on the wealthy.”

Ironically, while inflation has hit the prices of many products, flagship smartphones have been, for the most part, inflation-resistant. “Most of the price increases have been limited to premium models,” noted Max McCaskill, a staff writer with WhistleOut, a search engine for cell phone and internet services.

“The iPhone 16 has maintained the [US]$799 starting price that began with the iPhone 12 of 2020,” he informed TechNewsWorld. “The $799 release price of the Samsung Galaxy S24 was identical to the S21 from 2021. Google alone has deviated from this pattern by increasing the prices of the Pixel over the last couple of years.”

Other reasons besides inflation may deter consumers from purchasing a new phone. “Economic uncertainty and fear of job loss often play a larger role in the decision to postpone buying a new phone than inflation does,” Greg Sterling, co-founder of Near Media, a platform for news, commentary, and analysis, explained to TechNewsWorld.

“Consumers sometimes adopt the mentality of ‘If it isn’t broken, don’t fix it,'” stated Chip Lupo, a writer for WalletHub.

“My current iPhone 12 works perfectly well. I plan to keep using it until it no longer receives support. At that point, I’ll consider an upgrade,” he shared with TechNewsWorld.

Consumers are increasingly opting to keep their current smartphones rather than purchasing new ones. “We’ve certainly seen replacement cycles lengthen. We’ve seen a lot of growth in the refurbished and used categories, too,” said Ross Rubin, the principal analyst at Reticle Research, a consumer technology advisory firm based in New York City.

“Smartphones have reached a maturity stage,” he commented to TechNewsWorld. “Look at Apple’s recent announcement. They continue to enhance the platform, but elements like a new camera control are unlikely to drive masses to exclaim, ‘I must have this immediately!’ and discard their existing devices.”

“The significant leaps between model upgrades are becoming fewer,” noted Dylan from NexaTech.

“People are keeping their devices longer as the changes—in aspects like processing speed, camera technology, or software updates—are more evolutionary than revolutionary,” he elaborated.

Dylan highlighted that environmental considerations are increasingly swaying consumer buying decisions. He pointed out, “A growing number of consumers, especially the younger ones, are mindful of the ecological consequences associated with frequent upgrades,” he stated.

“Another factor is the longevity of software,” he continued, “as companies now provide prolonged software updates for older devices, which allows consumers to retain their gadgets longer without losing out on features.”

A study revealed that over 40% of Americans believe acquiring a new iPhone justifies the accumulation of debt. WalletHub’s Lupo expressed his astonishment at this sentiment. “It’s shocking that anyone would consider it acceptable to incur debt over an iPhone,” he remarked. “Debt should be reserved for significant expenses like housing or possibly a car, but an iPhone? That proportion seems excessively high.”

“The readiness of some individuals to undertake debt for the newest iPhone underscores the power of Apple’s branding and marketing abilities,” noted QueryPal’s Nag.

“Apple has successfully positioned its products as premium, desirable items that are worth stretching one’s budget for,” he continued. “This reflects both the perceived quality and status associated with Apple products.”

“However,” he said, “it also highlights potential issues with consumer financial literacy and the power of marketing to influence purchasing decisions, sometimes against consumers’ best financial interests.”

Another survey finding is that 42% of Americans think having the latest iPhone is important for their self-image. Further findings included:

“Smartphones have evolved into an extension of our identities,” Dylan said. “In many ways, they’re not just tools for communication but are markers of success, personal taste, and even social currency.”

“The technology we carry signals to others how connected, productive, and affluent we are,” he continued.

“The culture of regular upgrades, particularly among the younger demographic, feeds into this cycle,” he added. “Apple and Samsung have done an exceptional job at positioning their devices as luxury products, much like designer clothing or cars, making it easy for people to link their self-image to the phones they carry.”

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