Why the iPhone and other high-end smartphones are losing appeal quickly

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Apple is just days away from announcing a new iPhone. And rumor has it that one of the new models set to debut, currently being called the iPhone 5se, will look a lot like one of their older models, the iPhone 5. That begs the question: does a smartphone launch have the same appeal that it had a few years ago? And are consumers really going to pay full price for a new phone as cell phone plans deviate away from the subsidized phone model? Well, a new study out gives us a bit of insight into those questions.

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Mobile shopping app Branding Brand launched a study to gauge consumer interest in this new iPhone. It wasn’t good. It turns out that 78% of Millennials, Gen Xers and Baby Boomers are pretty content with the devices currently in their pockets. And who could blame them?

Smartphones are certainly ubiquitous. Many Americans have cut out traditional landline service altogether, turning to their smartphone for most of their communication needs. And these phones don’t stop there. We check the weather, sports scores, traffic and social media blurbs all from the roughly five-inch screen that we tote around. But there are two main reasons that the phones we use every day, for almost everything, are becoming less of a burdensome impulse purchase in our lives.

Innovation is incremental

The actual study that the mobile shopping app was performing was assessing whether or not there was interest in a new Apple product being released with a smaller screen size. Basically, this new Apple phone mimics their older models in look and screen size. Nothing is new under the sun and one of the world’s largest electronics companies seems to be taking a step backwards with this release.

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That’s because, when it comes to innovation on the smartphone front, a lot of change has happened in a very short time period. But in the last couple of years that change has slowed. And while we’ll still see innovation, it won’t be revolutionary like in years past. There are only so many megapixels that can be added to a camera before it starts to look like just a gaudy number. Likewise, added screen resolution can only go so far before the it becomes indistinguishable to the human eye.

I’m not trying to pooh pooh these great new devices. I’m just saying that the old cycle of upgrading your phone every year makes far less sense than it did a few years ago. At least then you were getting a far superior device. These days many of these same “high end” features are available in devices that cost less than $300 non-contract.

New manufacturers have entered the U.S. cell phone market and that competition has also driven prices down. For instance, the new Huawei Honor 5x has a retail price of $199 and has a full HD 5.5-inch screen. The reviews from tech writers are pretty glowing, especially considering the price. The OnePlus One X is another example of a new player in the game. This Chinese company has received rave reviews for past iterations of their phones that were available via invite only. Now, you can purchase their One X phone any time you want for $249. While these phones might not give you every feature that you can expect in a flagship smartphone from Apple, Samsung or HTC, they come remarkably close and you’ll incur far less out of pocket costs.

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Phone plans are changing the way we buy

The other main reason we have so many great smartphone choices under that $300 price point now is the ultra-competitive landscape of monthly cellular service providers. Companies like Republic Wireless, RingPlus and Boost Mobile (along with myriad others) are changing the old model of providing cell phone service — and quickly. No longer are you tied down to a seemingly interminable two-year contract with a subsidized phone acting as a millstone around your neck. The monthly plans being offered are drastically cheaper and have made consumers more willing to pay full price for a phone considering the substantial monthly savings. That being said, we still want a great phone at a low price! And a $649 iPhone doesn’t count as low cost.

And the market has responded. In fact, Republic Wireless offers two great (and cheap) options when signing up for their service. The Moto G (which also gets good reviews) is only $199 while the slightly smaller and inferior Moto E costs $129. Ring Plus and Boost allow you to bring your own phone, allowing you to peruse deals at your leisure. You can also buy phones on their website — and Boost currently has a great deal on the iPhone 5s.

With the likes of Google entering into the cell phone service industry as well as manufacturing phones, prices on service and hardware will continue to drop. The old model of getting a new phone every year just doesn’t make sense. And manufacturers will have to adapt. The biggest crunch will likely come at Apple’s expense as they currently don’t make any devices that can be had at the price point most consumers are comfortable with. The next iPhone, or any uber-expensive “flagship” phone, is much less appealing in the current market. And that’s a good thing for shoppers.

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