According to new data by The NPD Group, $1,000 is too expensive for the overwhelming majority of phone buyers.
NPD’s research shows that just under 10 percent of buyers are willing to pay $1,000 or more for a phone. This could pose a significant challenge for 5G adoption. On the one hand, 5G awareness and purchasing potential is very strong, especially for a technology that has not been widely deployed yet.
“In fact, awareness has reached nearly 3 out of 4 consumers, totaling 73 percent, at the end of the first half of 2019,” according to NPD. “This is up from 44 percent at the end of the first half of 2018. Alongside increasing awareness, 33 percent of smartphone owners report interest in purchasing a 5G-enabled smartphone.”
Unfortunately, however, most 5G phones are falling in the $1,200 price range, limiting how many customers will be able to make the jump.
“Overall awareness and purchase intent reported by consumers is high, but only a small segment of the market can afford these $1,000+ devices,” noted Brad Akyuz, executive director, industry analyst, NPD Connected Intelligence. “This provides an opportunity for both carriers and manufacturers to focus on diversifying their 5G portfolios by introducing more affordable mid-tier 5G models to enjoy faster adoption rates.”
It will be interesting to see if the revolutionary speed increases offered by 5G change the public’s perception of an acceptable phone price point, or if manufacturers will need to come out with cheaper models to entice buyers.