AT&T and Verizon hit record low smartphone upgrade rates last quarter

AT&T and Verizon both hit record low smartphone upgrade figures in Q1 2019, according to BTIG analyst Walter Piecyk. As US consumers hold onto their phones for longer, AT&T and Verizon are feeling the burn: AT&T's device upgrade rate dropped to 3.5% year-over-year (YoY), and Verizon's device upgrade rate fell to 4.4% YoY.Here's what it means: There are two chief trends lengthening the US smartphone upgrade cycle, and in turn, pulling down AT&T's and Verizon's smartphone upgrade figures. The average price consumers are paying for smartphones is rising. In 2018, the average selling price of smartphones is expected to have increased more than 10% from 2017. As the price of smartphones continues to climb, consumers may be less willing to shell out the cash for a new model.Premium phones lack new, generation-specific features. The technological gap between device generations is decreasing, which means older models are usually capable of handling most of the same functions as their newer counterparts. For, example the iPhone X and iPhone XS share a similar design and set of features. Consumers likely won't see a reason to ditch their old smartphones for the next generation of devices without distinct new features. The bigger picture: AT&T and Verizon's smartphone upgrade figures are likely to rebound next year as two trends are emerging that will shorten the upgrade cycleAT&T's and Verizon's 5G network rollouts will likely push subscribers to upgrade to 5G-compatible phones. Consumers are looking forward to 5G: Thirty percent of wireless subscribers reported they were likely to sign up for 5G by the same time next year, according to HarrisX. But in order to take advantage of the benefits offered by 5G — such as low latency and fast video download speeds — they'll need to upgrade to 5G-compatible phones.New technological advancements to smartphone form factors will hit the market. For example, Samsung's forthcoming foldable phone represents a significant shift from current smartphone design. Three-quarters (76%) of BI Insiders from Business Insider Intelligence's proprietary panel, who tend to be tech-savvy early adopters, are interested in a foldable phone as their next smartphone. Although our data isn't representative of the general population, early interest among these respondents is a promising sign for early upgrades to the new smartphone form factor in the year ahead.