North America's Mobile Phone Replacement Rate Trends and Comparisons

TapTechNews July 1st news, since the introduction of the iPhone in 2007, the mobile phone replacement rate in North America has been leading the world. However, since 2012, the replacement rate in North America has continued to decline and was only close to other regions in 2019.

The latest research by the TechInsights smartphone team shows that in 2024, the Central and South America (CALA) region will exceed North America with a replacement rate of 28.2%, and both regions have a replacement cycle of 43 months.

While the global replacement rate is 23.8% with a cycle of 51 months. The smartphone replacement rate in the Central and Eastern Europe region will replace the Central and South America region from 2027 to 2029.

TechInsights predicts that from 2025 to 2026, the replacement rate in Central and South America will still be the highest, which are 28.8% and 29.6% respectively, equivalent to a replacement cycle of 42 months and 41 months. However, starting from 2027, the agency predicts that the replacement rate in Central and Eastern Europe will exceed that of the Central and South America, reaching 30.8% and will continue to rise to 33.8% - a new high in the region. This reflects the maturity of the smartphone market and the lack of new features to attract consumers.

Previously, the replacement rate in North America was the highest in the world, and now, TechInsights expects that the replacement rate between this region and Western Europe, Central and South America as well as Central and Eastern Europe will be closer. There are several factors that contribute to this convergence. For North America, since the 27.7% replacement rate in the US this year is much lower than the 31.4% in Canada, the US has driven the decline in the replacement rate in this region.

The main reason is that the US carriers have gradually abandoned the dominant subsidy model since 2014/2015 and instead adopted the mobile phone financing (TapTechNews note: the so-called EIP plan) and mobile phone leasing model.

Compared to the subsidy model, these new business models usually lock customers in a three-year plan rather than a two-year plan and suppress upgrades when the contract expires because the monthly cost is lower after the phone cost is paid off.

In addition, the improvement of smartphone quality and limited hardware innovation are also among the reasons for the extension of the smartphone replacement cycle in North America. Similar trends have also occurred in Western Europe. Although the carriers have not abandoned the subsidy model, in many cases, the contract duration has also been extended to three years.