Unsurprisingly perhaps, Apple and Samsung's most recent earnings report show that the majority of people aren't willing to shell out $1,000 on a new smartphone model.
It seems that people want to spend less on their phones, and if they do spend big, they will wait for a few model generations before upgrading again.
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As CNBC reports, Apple reported iPhone revenue of $25.99 billion for the fiscal Q3 2019 — lower than Wall Street estimates of $26.31 billion, according to FactSet. This is 12% lower than the same time last year.
Samsung also recently outlined a downturn in profits, saying it was facing challenges due to trade rows between the U.S. and China and Japan and South Korea.
In a statement, Samsung said, "sales of flagship models fell QoQ on weak sales momentum for the Galaxy S10 and stagnant demand for premium products."
Why the slowdown?
There are several reasons people are buying premium phones at the same pace as before.
Firstly, the novelty may simply have worn off. Smartphones are so ubiquitous that the thought of getting a new one might not hold the same sense of excitement as it used to.
As CNBC reports, people are also holding onto phones for a longer period. Bernstein analyst Toni Sacconaghi said in February that iPhone owners are now upgrading about once every four years — less than previously.
Apple CEO Tim Cook also recently said that users are now holding onto their iPhones for longer than they used to.
Innovation from model to model has also slowed down. New models have great cameras, but so do old ones. Older models are also often sold at reduced prices, made even lower with a trade-in.
The biggest recent innovation is the foldable phone screen, though that is far from being perfected, and upcoming foldable smartphones are priced at approximately $2,000.
Apple is looking to place its focus on services, not just hardware and software, in the future. Its Netflix-style subscription service, that will allow users to manage subscriptions for various channels under one username, will launch this year.
Samsung, meanwhile, is hoping to bring that novelty factor back to smartphones with their Galaxy Fold model.
Though the initial launch in March ran into serious troubles with the phone's foldable screen breaking for several reviewers, Samsung now hopes to release the model without issues in September.