Three big reasons why Americans do not modernize their phones

Last month, Verizon and AT & T formalized something you've probably been aware of for a while: US smartphone owners are making a much smaller upgrade than before. In fact, they are at record levels in the two largest US operators, as people seem more than ever happy to control their existing devices. This is a worldwide trend, as the smartphone market is maturing and becoming saturated in many developed countries. However, it is in the United States that it is the most marked, for some reasons particular to this country.

The duopoly Apple and Samsung

If you asked me to name the most exciting phones of 2019, I think above all of Huawei's P30 Pro, with its array of exotic cameras and unparalleled photography in low light, followed closely by the OnePlus 7 Pro and its superb screen at 90Hz. Is any of these phones available on AT & T or Verizon? Nope. Huawei is effectively banned by the US government, while OnePlus only has a distribution contract with T-Mobile in the country, which is better than nothing, but remains relatively niche.

The typical American smartphone shopper has the choice between two brands: Apple and Samsung. Browse the online offers of AT & T, Verizon, T-Mobile and Sprint and you will see scrolling various models from these two companies, punctuated by the occasional LG-run and Kyocera's occasional darkness. If you scroll the screen far enough, you will see the Red Hydrogen One, a garbage phone, but it comes from an American company. They let him in.

Chinese phone brands such as Huawei and Xiaomi are currently in a leading position in most global markets, but in the US they are almost completely absent. In order for a Chinese phone manufacturer to install a device on a US carrier, it must do so through a backdoor to assign it a familiar brand, as does TCL with its BlackBerry and Palm handsets. Even OnePlus is above all an acceptable brand in front of the same giant Chinese conglomerate that operates the Oppo and Vivo brands. The geopolitics of the US government is played out in operator stores, reducing consumer choice to products of US companies, mainly Apple, or manufacturers from countries allied with the United States, such as South Korea.

The stagnation of Apple and Samsung

Being limited to two vendors may not be a problem if they compete as much as possible, but Apple and Samsung seem to be content with essentially iterative upgrades. "The incremental changes from one model to another have not been as important, and that has not been a sufficient incentive," said Matt Ellis, chief financial officer of Verizon.

Think about what makes a Samsung Galaxy S10 irresistible: a great screen with tiny cases, a great camera, a big battery with wireless charging, fast performance, water resistance and, as a bonus, a plug helmet. The Galaxy S7, three years old, has all these features. An S7 owner may absolutely want an S10, but he certainly is not. need a. It's a situation that is very similar to Windows laptops, where screen frames disappear, everything becomes lighter and faster, but the rate of improvement is too gradual to force most people to make a bet. at a fast level.

Picture of James Bareham / The Verge

Apple had a major redesign with the iPhone X in 2017, sparking a wave of upgrades from people waiting for such a change, but the company has also maintained a cautious pace with regard to new features and hardware features. capabilities. You will certainly find it hard to tell the difference between an iPhone X and XS, just as you would be hard-pressed to tell the difference between an iPhone 6 and a 6S at first glance.

Without Huawei to push them into more aggressive upgrade cycles, Apple and Samsung can only afford to keep pace with each other, at least in the US market. Huawei's quest for new features has been extremely appealing to phone buyers in Europe and around the world. The Chinese supplier recorded a 50% growth in phone sales in the first quarter of 2019, while Samsung and Apple both weakened.

The new economy of super-lighthouses

It is a poorly guarded secret that mobile operators worship on the altar of ARPU (average revenue per user). They are increasingly bundling their phone line subscriptions with subscriptions to premium video or music services, and offering long-term payment methods to help people buy the $ 1,000 phones that Apple offers. Samsung and Google. This strategy worked surprisingly well, with consumers only seeing a marginal increase in their monthly cost and valuing the increased capabilities (or absolute aesthetic and luxurious appeal) of these exclusive-level devices.

But there are two long-term problems for hardware manufacturers selling expensive handsets. The first is that the person who spends twice as much on the phone as before would naturally expect to keep his brand new shiny phone for twice as long. Apple has always supported multiple generations of iPhones with its latest iOS updates. Even if the Android providers were not so good, many people can continue to use an older version of Android. The other big problem is that the addressable market of people willing to spend four digits on the phone is inherently small.

In the United States, manufacturers and telephony operators have moved the most innovative and attractive devices to a price that can not be achieved by a majority of people. They have masked it, but it's still a lot of money. The Galaxy S10, the cheapest variant of Samsung, the S10E, still costs $ 749. Americans' smartphone budgets have not kept pace with smartphone prices, and now, when they look at their usual price range, they see only a significant lack of innovation. The OnePlus 7 Pro is a rare exception, bringing a terribly beautiful display with no scope to the market below the $ 700 mark.

Existing customer satisfaction, failure to deliver innovation at prices where people would be ready to modernize, and almost total absence of Chinese competition have undermined the vitality of the US telephony market. Smartphones are always fun, exciting and packed with new features, but you may need to get out of the US to find one that's both compelling and affordable.