NPD Says Costly 5G Smartphones Could Be Barrier to US Upgrades
Premium pricing for top-line smartphones could be a barrier to the U.S. 5G upgrade, blogged NPD Monday. Just under 10 percent of consumers are spending over $1,000 on smartphones, and 5G phones are hitting the market at about $1,200. “Consumers…
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are holding onto their smartphones for longer periods, which has presented a challenge for the smartphone market,” said analyst Brad Akyuz. “Manufacturers and carriers are expecting 5G to help reinvigorate the upgrade cycle, but pricing could present another hurdle.” Consumers in the top 10 U.S. markets account for 39 percent of $1,000-plus active smartphones, NPD said, with users in New York City and Los Angeles most likely to buy four-figure devices. Consumers in the top two markets are 29 percent of the U.S. population, over-indexing in $1,000-plus phones by 25 points. The two markets should be a primary target for carriers to advance 5G networks and for phone makers to educate consumers about the benefits of 5G, the research firm said. Awareness of 5G is high (see 1912040044) and purchase potential is strong, said NPD, with 73 percent of consumers aware of the technology at the end of first half 2019 vs. 44 percent a year earlier. In China, Xiaomi took an aggressive stance on 5G Tuesday. It unveiled a sub-2,000-yuan model under its Redmi brand (starting at $284). The 6.7-inch Redmi K30 5G, with four cameras, is based on Qualcomm's Snapdragon 765G gaming-centric 5G chipset.