Mobile Phone Upgrade Cycle Is Shrinking: Study

by CXOtoday News Desk    Apr 17, 2017

smartphone

Two in three users to upgrade to a new mobile phone in the next twelve months, according to a recent survey done by Counterpoint Research analyst in India.  

The study states that mobile phone replacement cycles are shortening from an average of 24-30 months to under 20 months upgrade cycle.

The report highlights multiple factors that drive customers’ will to upgrade phones in the near future.

The study highlights that many users prefer phone with enhanced memory, storage or battery capacity which is driving a pressing desire to upgrade.

The study noted that consumers are looking to upgrade to a phone with 4G LTE capability and especially VoLTE ready. This is mainly driven by Reliance Jio’s VoLTE specific network and consumers’ high intention to switch providers to Jio.

CyberMedia Research data shows that in FY 2017, 45% of the total mobile phone shipments in India comprised of VoLTE phones.

More than 50 percent respondents are likely to choose Jio over any other operator for their new connection or porting from the existing one. While one fourth of the respondents showed interest for Bharti Airtel.

Online is surpassing other channel for mobile phone sale as 70 percent respondents consider online stores as their preferred medium of purchase.

According to Pavel Naiya, Senior Analyst, Counterpoint, “Online retail platform competition is heating up. While Amazon is investing heavily in India, Flipkart has successfully secured $1.4 Billion in funding to secure its place as leading online channel. We expect ultimately there will be three dominant online sales channels. Paytm is currently in a minority position, but the strategic investment by Alibaba suggests it will grow in strength while Snapdeal fades.”

“With rising competition, these platforms need to create differential push and pull strategy. Firstly, by adopting an effective social commerce strategy and secondly investing in next generation technologies such as Artificial Intelligence (AI) to utilize the huge data on online purchase patterns,” she added.

The study also finds that one third of the respondents were considering phones with features such as fingerprint sensor and powerful front (selfie) cameras as key features for their next smartphone purchase.