Upgrades Slow as Consumers Wait for Wow of iPhone 6

Without a blockbuster iPhone 6 this year is shaping up to be a bad year for smartphone upgrades according to a new report which predicts a continued slowdown as manufactures plan new smartphones and plans that offer faster upgrades for a fee.

The summer lull of new smartphones aside, a new prediction from UBS AG reported in The Wall Street Journal, points to a second year of lower than expected upgrades. This includes upgrades to a first smartphone and upgrades from a smartphone to a newer model.

A 9% drop in 2012 came even as Samsung delivered the breakout Samsung Galaxy S3 and Apple offered the iPhone 5 with a slightly larger display. At launch the iPhone 5 faced criticism for a lack of features with pundits claiming it offers, “no obvious reason to rush out and buy one.” Others boldly labelled the iPhone 5, “Less innovation than Android and WP8, in a bigger package.”

Based on rumors, the rest of 2013 doesn’t look good for reversing this trend. We expect an iPhone 5S, Samsung Galaxy Note 3, the Verizon HTC One, New Droid RAZR devices, a Nexus 5 and the Moto X to arrive yet this year, but they may not be able to offer the wallet-opening wow-factor that drives consumers to the store.

iPhone 6 rumors are already here, even though the phone isn't expected until 2014.

Consumers hold off on upgrades while they wait for specific iPhone features to wow them.

As more consumers are already using a smartphone, the initial wow-factor of everything a smartphone or an iPhone can do is not as easy to deliver. The latest data shows 60% of cell phone users own a smartphone, and on carriers where flagship smartphones are sold that percentage jumps up to an estimated 70% of users.

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We see devices like the Samsung Galaxy S4 adding bigger screens, gesture controls and eye-tracking to stand out, but consumers on Android and iPhone are demanding more in order to pay for an upgrade.

It looks like the iPhone 5S will arrive this year with the same looks and screen as last year. Rumors point to an iPhone 6 with a larger screen and a new design as a possibility in 2014. While Apple’s iPhone 5S problem is great for keeping current customers happy with their purchase longer, it does prevent a challenge for carriers and manufacturers to sell more smartphones.

Read: iPhone 5S vs. iPhone 5: 5 Things Buyers Need to Know

It looks like the iPhone 5S will arrive with the same look as the iPhone 5 and the same 4-inch display, counting on iOS 7, a better camera and other small features to entice an upgrade. Based on comments from consumers, the iPhone 5S may not be enough, and could leave many waiting for an iPhone 6 that might wow in 2014.

When asked about upgrading to the iPhone 5S or waiting for the iPhone 6, a 22-year-old iPhone 5 owner in Ohio told Gotta Be Mobile,

“For me personally, it would either need additional screen real estate, battery life, or NFC and induction charging for me to even consider it. A processor and camera bump isn’t going to cut it.”

Jay Yeater, a marketing professional that owns the iPhone 5, expressed a similar feeling, saying, “I have the 5 and I’m over it and iOS7 is only “ok” right now.”

Eric Bisignano, an accountant in Ohio, explained why he won’t upgrade from the iPhone 5 saying,

“I’ll likely wait for a 6. I’d consider going sooner for a bigger screen. But wouldn’t jump for marginal speed or battery life improvements.”

Mike Brice, of Pittsburgh, Penn. told Gotta Be Mobile he doesn’t plan to upgrade, saying, “Features would have to be amazing to overcome price since just upgraded six months ago.” Twitter user Lonotropic, a doctor who recently purchased the iPhone 5 off contract, plans to wait for the iPhone 6.

Still, there are users looking for specific iPhone 5S upgrades, which would be enough to earn an upgrade in 2013. Jeff Kirvin, an indie writer from Denver  who owns the iPhone 5 says,

“if the 5S has the rumored 2GB of RAM, 4-core GPU, bigger battery, I’m definitely buying a 5S.”.

Chad Kaup, a network administrator in Ohio hasn’t made up his mind, but is interested in the iPhone 5S if it comes with a capacitive home button.

Though some would argue the iPhone 5S name does more damage than the actual features, consumers are looking closer at smartphone purchases, and demanding more tangible features before upgrading.

  

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