Less than 10% of Americans are spending $1,000 on a new phone

Less than 10% of Americans are spending $1,000 on a new phone
It might seem that everyone around you owns a high-priced flagship phone. But according to data from NPD (via ArsTechnica), less than 10% of American consumers spend more than $1,000 for a new handset. So no, not everyone on the subway next to you is sporting the iPhone 11 Pro Max or the Samsung Galaxy Note 10+. And this means that the transition to 5G might not provide a big boost to the U.S. smartphone market as many expect.

5G, the next generation in wireless connectivity, will deliver download data speeds about 10 times faster than 4G LTE, and the faster speeds could draw in consumers who normally don't spend four figures on a new phone. These people might have sat on the sidelines over the last few years saving up to buy a 5G phone. However, there will still be a large number of Americans who would never spend $1,000 on a new device even if it promised them eternal life; for these consumers, the pricing of 5G phones is going to have come down sharply before they have an interest in purchasing one.

As you might imagine, the report notes that Americans living in big cities like New York City are more apt to spend $1,000 or more on a phone. But it is unclear whether this is due to the higher incomes that people earn in those huge metropolitan areas. NPD also suggests that because cities like New York City and Los Angeles are media centers of the country, flagship phones get more media coverage than other handset models. Many Americans love to hear about features and technologies on new flagship phones even though the majority of the country can't afford models that have all of these features.

Who will blink first, U.S. consumers or 5G phone manufacturers?

Samsung has tried to capitalize on this data by making sure that the major U.S. carriers offer at least one of its lower priced Galaxy A models. Samsung's goal on th isline is to offer a mid-range phone with a viable rear-camera system and large batteries at a decent price. Take the Galaxy A50, available from Verizon for 24 monthly payments of $10 with a new line, or $349.99. For that price, you get a 6.4-inch Super AMOLED display with a 1080 x 2340 resolution (which works out to an aspect ratio of 19.5:9. The phone is powered by the Exynos 9610 chipset and comes with 4GB of memory and 128GB of storage. On the back is a dual-camera setup (25MP primary + 8MP ultra-wide + 5MP depth sensor). The Infinity-O display used on the phone has a single punch-hole 25MP front-facing selfie snapper. A 4000mAh battery keeps the device running for a long time between charges. If you're not a phone snob or a power user, this phone might be perfect for you.

 And take a look at the resurgent Motorola. A device like the Motorola One Hyper features a 6.5-inch FHD+ display, a 32MP pop-up selfie camera, thin bezels, 4GB of memory and 128GB of storage for $399.99. With a Snapdragon 675 SoC inside, most average users might not notice much of a difference in the phone's performance (keep in mind that this model works only on GSM networks like those employed by T-Mobile and AT&T in the states). And if battery life is the most important thing on the spec sheet, there is the Moto G7 Power. Priced under $250 and free if you add a new line at T-Mobile, the device carries a 5000mAh battery that provides up to 3 days of use on a single charge. If you want an outstanding camera, the mid range Pixel 3a line is available for a price as low as $399.

If only 10% of Americans own a $1,000 phone, that means 90% of Americans have a lower-priced model. And this is why the iPhone 11 is outselling the iPhone 11 Pro and iPhone 11 Pro Max. Apple stunned everyone by pricing the 64GB model at $699.99, $50 cheaper than the launch price of last year's 64GB iPhone XR.

It should be interesting to revisit this data a couple of years after 5G becomes dominant in the states; someone will have to blink first. Will it be U.S. consumers shelling out for more expensive 5G phones, or will the manufacturers keep prices down and take a hit to their margins in order to help the migration to 5G?



1. TypicalGeek

Posts: 219; Member since: Feb 19, 2015

So about 35millions Americans people are spending over 1K for a new phone. Sounds about right.

2. dimas

Posts: 3435; Member since: Jul 22, 2014

I think galaxy a51 and a71 will also be a hit in the U.S. The a series has been making waves in my country, I wish more bang for the buck sony products will have success like this.

3. Loveneesh

Posts: 451; Member since: Jul 14, 2015

90% or more Americans have brain.

4. tonyv13

Posts: 128; Member since: Jun 07, 2015

Yea I'm not spending 1k for a phone last phone I paid close to 1k was the note 8. Had it for 4 months and sold it when I realize I made a mistake for spending so much money. I think the max Ill pay for a phone nowadays is $500.

12. CrapGame

Posts: 39; Member since: Nov 29, 2019

There are already several 5G phones like the Mi 9T for around $600 and high-end specs and there'll be many more to follow. This article incorrectly assumes all 5G phones will start at around $1,000 when that's been disproven by the facts. Coverage will be the limiting factor.

15. Plutonium239

Posts: 1258; Member since: Mar 17, 2015

This is referring to the US market. You honestly believe that the mi 9t will be allowed to be sold in the US market or any other phones manufactured by the same company? They won't until the Chinese government changes their law that requires companies to spy for them.

16. CrapGame

Posts: 39; Member since: Nov 29, 2019

I guess you missed the part where I said "many more to follow"? You've probably not heard of ZTE, OnePlus, Blu and Motorola who are all Chinese made or owned and currently selling phones in the US? There's also Asus who will definitely follow up the Zenfone 6 with a well priced 5G phone.

5. Tizo101

Posts: 644; Member since: Jun 05, 2015

Midrange is where things are happening in any case, why would you pay $1000 if you can get all that you need for $400?

6. Sroh42

Posts: 8; Member since: Jul 05, 2019

Then who the hell is buying millions of s galaxy note series and iphones ......PhoneArena..i guess ????

7. alligator

Posts: 109; Member since: Jan 09, 2016

And Note10+ on the cover photo for an article for the U.S. market when iPhones are with this price for over 2 years.

11. TadTrickle

Posts: 137; Member since: Apr 08, 2019

I love mobile tech, but I'm not dropping 1k either. I don't think I'll ever buy the latest again either, get prior years model for dirt cheap. Or wait 4 months for the latest to get it's price slashed

19. tntwit

Posts: 86; Member since: Sep 11, 2012

I would have been perfectly happy buying a Note 9, but it was cheaper to buy the Note 10+. Oddly, the best price I saw on the Note 9 was $300 off and the Note 10+ was $450 off at Best Buy without adding a line or trading in or switching services. I think that is another thing being overlooked in this article. I don't buy phones at full price and I am betting many others don't as well, just as you have said.

13. Tsepz_GP

Posts: 1215; Member since: Apr 12, 2012

This makes complete sense, considering how good mid range smartphones are. Nobody NEEDS a $1000 smartphone, those of us who buy $1000 smartphones are enthusiasts and people who like having whatever the best is at the time of purchase, I am happy with my iPhone XS Max couldn’t careless for a Galaxy A-whatever, but I can see why most be get that Galaxy as it has everything they need.

18. JRPG_Guy

Posts: 152; Member since: Jan 13, 2019

Great news

20. Vokilam

Posts: 1434; Member since: Mar 15, 2018

I don’t think that most of those that have latest best flagship actually paid full market price for it - if anyone has a half a brain and a little patience every device now will have a discounted price or a trade in option to drop the price by hundreds of dollars in only 2-3 months after release. I wish the 10% of $1000 buyers would be much lower so that manufacturers take notice.

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