Thanks for sharing Stuart, this is very comprehensive and insightful. If can include questions on payment and financing options in future that would be great. Might be able to triangulate more data points, for example, likely that many of the 11% of users earning below $25K that bought an $800 phone did through financing?
Regarding users purchasing a $800 phone replacing within 2 years at a higher rate (29%) compared to others, are you able to cross-check it with income level? Assume maybe those with higher income level are more financially capable to replace phone within 2 years compared with others who want to stretch out their purchases longer? Also assume telco channels might have longer replacement cycles over 2 years (assuming most postpaid telco contracts are above 2 years).
Regarding financing, definitely something for next time. As it stands among earners under £25k (n=64): 14.1% bought premium devices (£800+) and for context: high earners (£100k+) bought premium at 34.1% rate. So I definitely need the payment method data to show a correlation.
Income Levels: Higher income correlates with faster replacement among premium buyers. Among £800+ device buyers, percentage replacing within 1-2 years:
Under £25k: 33.3% replace within 1-2 years
£25k-£49k: 32.6% replace within 1-2 years
£50k-£99k: 24.6% replace within 1-2 years
£100k+: 46.7% replace within 1-2 years
The pattern isn't linear. The £50k-£99k band actually stretches devices longest (24.6%), while both low earners (33.3%) and high earners (46.7%) replace more frequently.
Perhaps low earners with premium devices may still be paying them off (upgrade cycle driven by financing terms). Middle earners might be cost-conscious but not constrained (maximise value). Higher earners simply upgrade when they want to (with fewer financial constraints). This creates a "middle income paradox"—the £50-99k band optimises device lifespan despite having financial capability to upgrade more frequently.
Retail stores (Currys, John Lewis, Argos): 81.2% keep 3+ years, only 8.8% replace within 1-2 years
Manufacturer stores (Apple, Samsung): 75.1% keep 3+ years, 21.2% replace within 1-2 years
Marketplace (Amazon, eBay, Backmarket): 74.6% keep 3+ years, 15.5% replace within 1-2 years
Telco stores (O2, EE, Vodafone, etc.): 74.0% keep 3+ years, 20.1% replace within 1-2 years
So, retail store buyers keep devices longest (81.2% holding 3+ years), not telco buyers (74.0%). Contract upgrades may be encouraging replacement rather than extension. Perhaps trade-in offers are having an impact plus Telcos actively marketing new devices at contract renewal, potentially offsetting any lock-in effect. Retail buyers, purchasing outright, may be more price-sensitive and deliberately stretching device lifecycles. The retail demographic also skews older (65+), which correlates with longer device ownership.
Thanks Sheng, great to have engagement this deeply with the data.
Yup, likely that the below $25K users may be doing so following some kind of financing plans, they can still get a good trade-in value within 2 years as well for the next purchase.
Another factor of the "middle income paradox" is that users in the $50-99K might have more commitments than someone earning below $25K. Assume someone earning $50-99K might be renting their own accomdation vs below $25K staying with family, which could give them more disposable income. Could explain why you see similar % split of those renewing within 2 years in those income brackets below $100K.
Thanks for sharing Stuart, this is very comprehensive and insightful. If can include questions on payment and financing options in future that would be great. Might be able to triangulate more data points, for example, likely that many of the 11% of users earning below $25K that bought an $800 phone did through financing?
Regarding users purchasing a $800 phone replacing within 2 years at a higher rate (29%) compared to others, are you able to cross-check it with income level? Assume maybe those with higher income level are more financially capable to replace phone within 2 years compared with others who want to stretch out their purchases longer? Also assume telco channels might have longer replacement cycles over 2 years (assuming most postpaid telco contracts are above 2 years).
Hi Sheng, great questions:
Regarding financing, definitely something for next time. As it stands among earners under £25k (n=64): 14.1% bought premium devices (£800+) and for context: high earners (£100k+) bought premium at 34.1% rate. So I definitely need the payment method data to show a correlation.
Income Levels: Higher income correlates with faster replacement among premium buyers. Among £800+ device buyers, percentage replacing within 1-2 years:
Under £25k: 33.3% replace within 1-2 years
£25k-£49k: 32.6% replace within 1-2 years
£50k-£99k: 24.6% replace within 1-2 years
£100k+: 46.7% replace within 1-2 years
The pattern isn't linear. The £50k-£99k band actually stretches devices longest (24.6%), while both low earners (33.3%) and high earners (46.7%) replace more frequently.
Perhaps low earners with premium devices may still be paying them off (upgrade cycle driven by financing terms). Middle earners might be cost-conscious but not constrained (maximise value). Higher earners simply upgrade when they want to (with fewer financial constraints). This creates a "middle income paradox"—the £50-99k band optimises device lifespan despite having financial capability to upgrade more frequently.
Channel Replacement Cycle: Telco buyers don't show notably longer replacement cycles:
Retail stores (Currys, John Lewis, Argos): 81.2% keep 3+ years, only 8.8% replace within 1-2 years
Manufacturer stores (Apple, Samsung): 75.1% keep 3+ years, 21.2% replace within 1-2 years
Marketplace (Amazon, eBay, Backmarket): 74.6% keep 3+ years, 15.5% replace within 1-2 years
Telco stores (O2, EE, Vodafone, etc.): 74.0% keep 3+ years, 20.1% replace within 1-2 years
So, retail store buyers keep devices longest (81.2% holding 3+ years), not telco buyers (74.0%). Contract upgrades may be encouraging replacement rather than extension. Perhaps trade-in offers are having an impact plus Telcos actively marketing new devices at contract renewal, potentially offsetting any lock-in effect. Retail buyers, purchasing outright, may be more price-sensitive and deliberately stretching device lifecycles. The retail demographic also skews older (65+), which correlates with longer device ownership.
Thanks Sheng, great to have engagement this deeply with the data.
Yup, likely that the below $25K users may be doing so following some kind of financing plans, they can still get a good trade-in value within 2 years as well for the next purchase.
Another factor of the "middle income paradox" is that users in the $50-99K might have more commitments than someone earning below $25K. Assume someone earning $50-99K might be renting their own accomdation vs below $25K staying with family, which could give them more disposable income. Could explain why you see similar % split of those renewing within 2 years in those income brackets below $100K.