p>What do the iPhone, the EVO 4G LTE and the Droid 4 have in common? They all have batteries that users can't replace themselves when they start having problems holding a charge.
For developers, that design is noteworthy because it's one of many factors that affect how often people replace their smartphone. Replacement rates affect the addressable market for apps built for each OS.
Smartphone vendors are increasingly using non-user-removable batteries because that design frees them to shoehorn in ones that last longer. If the battery wears out before the two-year contract expires, users have to decide whether it's worth paying around $80 to have it replaced or whether they should shell out the full, unsubsidized price for the latest and greatest model.
Other factors that influence replacement rates include:
- Prepaid or postpaid? If your app caters to demographics with a high percentage of prepaid usage, expect your customers to get a new phone much more frequently.
"Postpaid smartphone users tend to upgrade to a new phone every 18 to 20 months," says Julien Blin, Infonetics directing analyst for consumer electronics and mobile broadband. "For prepaid users, I believe it is every seven to eight months because of the nature of the business."
- The end of early-contract-renewal incentives. Until recently, some operators let customers upgrade to a new model at a deep discount even when they still had six months or more to go on their contract.
"Some carriers have started to cancel early upgrade programs because they are losing money on the subsidy cost and duration of the contract," Blin says. "In fact, for the iPhone 5, it looks like AT&T might have phased out its early upgrade program. [But] some smartphones users (e.g., die-hard Apple fans) don't mind paying a premium to get the latest and greatest."
Changes to those programs are particularly noteworthy for developers that create apps for specific operators. If eliminating an early upgrade program increases churn for a particular operator, then that app's addressable market shrinks.
Refurbished smartphones are significantly cheaper than their brand-new counterparts. So if the selection of refurbished devices grows -- including models that are less than a year old -- it's possible that more people will switch smartphones more frequently.
- The rise of the must-have smartphone. Some people don't mind paying a hefty premium to have the latest model outside of new-contract or new-customer incentives.
"The refresh cycle is reducing year over year because of companies like Apple or Samsung who offer new flagship devices -- the iPhone 5, the Galaxy S3 -- every year," says Blin, who was strategy manager at Samsung, where he advised the CEO about products such as the Galaxy family of tablets and smartphones.