Americans Shift to Phone Leasing as Upgrade Culture Fades

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A new survey shows that 29% of Americans are choosing to lease their smartphones rather than buy them outright, signaling a fundamental shift away from the tech industry's long-held upgrade culture. Factors like rising component costs, cost-of-living pressures, and extended software support for older devices are driving this behavioral change, as consumers prioritize battery life and functionality over the latest AI features.

Why it matters

This trend represents the smartphone industry's equivalent of 'cord-cutting,' as consumers increasingly opt for more flexible and affordable leasing options over outright ownership. It challenges long-standing business models and will reshape everything from carrier plans to trade-in values, as manufacturers adapt to keep users in their ecosystems longer.

The details

According to the Allstate Protection Plans survey, only 22% of Americans now upgrade their smartphones within 12 months, while 27% wait two years and 23% stretch to 3-4 years. Battery life has now surpassed AI features as the top purchase driver, as consumers prioritize functionality over the latest technology. Meanwhile, rising component costs - with memory prices surging 200% year-over-year - are forcing manufacturers to pass more costs to consumers, making the $1,200 flagship purchase feel increasingly reckless.

• The Allstate Protection Plans survey was conducted in January 2026.
• TrendForce projects a 15% drop in global smartphone production for 2026.

What’s next

As the shift to leasing continues, manufacturers will need to adapt their business models and strategies to keep users engaged in their ecosystems for longer periods of time. This may include offering more comprehensive software support, improving trade-in values, and developing more flexible leasing options.