It seems Australians are becoming even hungrier for new technology, as more consumers choose to reject 24-month contracts in favour of buying their mobile phones outright.
A new study by research firm Telsyte shows that just 43% of smartphone owners acquired their device on a one or two-year contract in 2013, down from 57% in 2012. A further 26% received their phone through work or as a gift or hand-me-down, while the remaining 31% chose to buy their device outright.
The report took research sourced from the financial reports of telcos and device companies, alongside the findings of an online survey of 1018 respondents.
Aussies want to upgrade more often
Researchers believe one reason for the decreased number of mobile phone contracts could be that Australians want to upgrade their devices more often, and don’t want to wait the full 24 months of a contract to upgrade to a new device.
“The unbundling of handset and mobile service contracts has been growing in popularity as consumers seek new handsets more frequently than the typical 24 month contract,” Telsyte managing director Foad Fadaghi said.
“It means the [mobile resellers], which have been growing strongly, have a potential foothold in the market if people are less likely to lock themselves in for two years to get a phone.”
Telsyte reckons there were 15 million smartphone owners in Australia at the end of 2013, up 21% (or 2.6 million) on the previous year. Perhaps surprisingly, Australia now has one of the highest smartphones penetrations in the world at 64%, sitting just behind Hong Kong and Singapore.
Reduced telco subsidies make phones on contract more expensive
But it’s not just a desire for new technology that has pushed many Australians to abandon mobile phone contracts, Telsyte also points to the reduced subsidies now being offered by Australian telcos.
Last year, Optus CEO Kevin Russell said subsidies offered on high-end smartphones in recent years were “not appropriate”, which led many carriers to cut back on the number of phones provided for free or at low cost on mobile phone contracts.
This resulted in higher total costs for smartphones bought on contract, which pushed many consumers to buy outright instead.
More phone hand-me-downs
As more smartphone users choose to upgrade more often, there is the question of what to do with their old handsets. While some carriers allow for trade-ins to lower the price on the new phone, many smartphone owners choose to gift their hand-me-downs to family members or friends.
This was well documented in the study, as the number of people who received their phone as a hand-me-down or gift nearly doubled from 2012 to 2013.
For those who choose to buy new, what are they buying? The Telsyte research showed that Android was the most popular platform, with a 50% market share, Apple was a close second with 42%, followed by ‘Others’ (including Microsoft, Blackberry and Symbian) with 8%.
Research also showed that many smartphone users plan to stick with what they know, with 73% of iPhone users who intend to buy a new device choosing to stick with Apple, and 56% of Android users planning to stick with Android when they next buy a phone.
The post Australians reject lengthy mobile phone contracts appeared first on Quid.