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Hello, I hope the fall is going well for you.
I have a question: have you bought an iPhone 17?
I haven’t, despite seeing the deluge of advertising like everyone else and being able to afford it (not a given). There’s a giant Apple billboard near my apartment with a giant iPhone 17 Pro on it in its new gold color.
Why haven’t I? I’m perfectly happy with my current device, an iPhone 14 Pro that I got 3 years ago. It’s not clear what features the new device offers that would improve my life.
By the way, back in the day, I was a BlackBerry guy, and then a Samsung Sidekick user. Once upon a time, I even had a Palm Pilot. So I’ve changed devices over the years, but now I don’t feel a need.
Chances are this is pretty familiar to you. The average phone replacement cycle has gotten longer and longer for Americans over the past 10 years, going from 2 years and change in 2015 to now approaching every 3 years.
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Said the chairman of Verizon recently, “I mean, we remember when we changed the phone every year. That was exciting times. The resilience and the quality of the phones has improved quite dramatically over the last five to 10 years, so people can keep them much longer.” Devices aren’t innovative to the same degree; the new one is similar to the last one. He noted that the phone replacement cycle is set to exceed once every 3 years for Verizon customers.
When I bought my iPhone 14 3 years ago, I got it ‘for free’ because I entered a 2-year contract with Verizon to pay it off. But is it free? “The average customer is paying thousands of dollars for that ‘free’ phone,” observes Lauren Benton, the GM of Back Market USA, the leading seller of refurbished devices including iPhones.
She’s right in my case; I paid Verizon $140 a month on my new contract that lasted 2 years.
That’s $140 x 12 x 2 = $3,360.
If we assume that the baseline cost of my data was about $50 a month – a bit more than what I’m paying Noble now – I paid them an extra $2,160 over 2 years, or $3,240 over the past 3 years since I continued to pay them $140 a month even after my phone was paid off.
That’s a very expensive ‘free’ phone.
“The device replacement cycle is how big wireless keeps us stuck in place,” Lauren says. “We operate in 18 countries. In only 2 of them are phones even allowed to be ‘locked’ to one carrier: the United States and Japan. In Europe, it’s literally illegal to have a phone locked.” Perhaps not coincidentally, the average European is paying about $35 a month for wireless data, less than half the $83 a month that the average American is paying. I’ve gotten animated about this because that extra $48 a month per person adds up to a tax of tens of billions a year on Americans.
Imagine a country where you simply buy a device at a reasonable price and then connect that device to the network of your choice. That’s what most of the world experiences.
“You can buy a refurbished iPhone 15 – which we think is a better device than the 17 - from us for about $500,” Lauren says, “and then connect it to whatever network you want.” The average Noble Mobile user is paying about $40 a month. The savings to the average consumer are staggering.
I’ll admit that, if I hadn’t started Noble, I would have simply walked into the Verizon store to trade in my current phone and get the new model whenever my phone dies; they would have then signed me up for a new 3-year contract (they’ve made them longer now) and charged me at least the $140 a month I’ve been paying them for years. I said to Lauren that I’ve probably given Verizon an extra $15,000 or so over the last 26 years. She said, “Oh, it’s a lot more than that given opportunity costs and compound interest. I say to folks that if we can free people of big wireless, we’ll literally be funding their retirement.”
She’s right; Verizon paid $11 billion to shareholders last year in dividends. AT&T another $7 billion. Multiply that by 20+ years? That’s enough to make a down payment on retirement for a lot of Americans.
It’s why I’m so excited to move us forward with Noble Mobile. Will we stay on a mindless treadmill funding the shareholders of big wireless? Or will we use our newfound freedom from the upgrade cycle to make a better choice that serves us and our values? Your phone is unlocked and you’re a free agent. In a country where millions of Americans are looking for ways to save money on our monthly bills, I’m betting on the latter.
For my conversation with Lauren Benton of Back Market about the American wireless industry click here. Offline no-phones party is on the way to Brooklyn, Chicago, SF, and LA this week in connection with the Scott Galloway podcast tour – see you there! Email [email protected] if you want a few months off from your wireless bill and want to be rewarded with Noble Mobile. Look up.
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