U.S. Consumers Hold Back on Smartphone Upgrades Amid Economic Concerns

Recent findings from a survey conducted by WalletHub reveal that approximately 59% of U.S. consumers are postponing plans to purchase a new smartphone this year, citing concerns over tariffs and inflation. This trend coincides with the launch of the iPhone 17, which Apple has marketed as a device featuring a thinner design, improved displays, and a camera capable of 4x optical zoom.

The iPhone 17 marks Apple’s first release since the imposition of tariffs under the previous U.S. administration, which may have contributed to increased consumer hesitation. According to ZDNet, the impact of these tariffs is being felt across the market as consumers face rising costs and limited financial flexibility.

To assist consumers in managing their expenses, WalletHub has developed a Cell Phone Savings Calculator. This tool helps individuals weigh the benefits of purchasing a phone outright versus opting for installment payments. Despite the allure of new technology, the survey indicates that only 1 in 4 respondents believe it is worthwhile to incur debt for a new iPhone, suggesting a shift in consumer priorities as economic pressures mount.

Factors Contributing to Declining Smartphone Sales

Several key factors have emerged that explain the decline in smartphone sales. Global smartphone shipments fell to 288.9 million units in the second quarter of 2025, primarily due to subdued consumer demand. The ongoing chip shortages have exacerbated this issue, creating production delays and resulting in higher prices for potential buyers.

Moreover, the rising cost of living has made consumers more cautious about spending, leading to a notable decline in smartphone sales. A general lack of confidence among consumers further complicates purchasing decisions. Many users are also holding onto their devices for longer periods, resulting in a saturated market with diminished demand for new models.

As consumers become more cost-conscious, there is a growing trend towards pre-owned and refurbished devices. Nearly 90% of survey respondents feel that iPhones are overpriced, reflecting a collective shift in sentiment regarding the value of new smartphone releases. Additionally, almost 75% of individuals believe that new cell phones have lost their appeal, highlighting a potential diminishing interest in constant upgrades.

Consumer Perceptions and Future Implications

The findings from WalletHub suggest that consumers are increasingly seeking value for money. A significant 61% of respondents believe that current cell phone plans are not priced fairly. Interestingly, 70% of people express a preference for human experts over artificial intelligence when searching for the best cell phone plans, indicating a desire for personalized advice amid technological advancements.

Chip Lupo, a WalletHub Analyst, commented on the survey’s implications: “This year, consumers are holding off on upgrading their phones, as 59% of people say that tariffs and inflation will keep them from buying a new phone.” He further noted, “When day-to-day living costs are already high, it’s hard for many people to justify an expensive phone upgrade. In fact, nearly 90% Americans think iPhones are overpriced, so Apple and other phone companies may need to consider lowering prices or offering more substantial feature differences between models to entice customers.”

As smartphone manufacturers navigate these challenging economic conditions, they will need to adapt their strategies to meet changing consumer expectations and regain market interest. The current landscape suggests that an emphasis on affordability and value may become essential for companies aiming to attract new buyers in the coming years.