While in the past consumers bought cheap smartphones because they were more affordable, now they often purchase the gadgets due to preference. This has resulted in major wireless carriers ending their two-year contracts, due to the mobile phone industry shifting to low-priced devices, and job cuts by smartphone-making giants.
Just a few years ago, signing a two-year mobile contract with United States telecoms was the status quo. Consumers were uncertain which new services they would offer in the future, or if rival companies would later offer better packages. However, getting a high-end phone for $200 was worth it.
In fact, for several years brand new unlocked mobile devices were only available through carriers. This boosted demand for the pricey models.
However, wireless service providers have been shifting away from lock-in contracts. T-Mobile started the trend with its "Uncarrier" campaign that offered tons of perks instead of high-end subsidized phones, according to Gizmodo.
Verizon and Sprint have continued the trend. Although AT&T still offers two-year contracts, that will likely change within time.
As a result, mobile device owners must now pay full price for their units. However, it also means that carriers have to provide better service so consumers will not shop around.
Like mobile device carriers, smartphones themselves are also changing. This is evident in the Google Nexus phones having a price tag that is drastically lower than the Apple iPhone models.
The Nexus 5 represented the shift to quality unlocked smartphones. Their price points are a fraction of the cost of high-end models, and run tons of software. Besides that, they offer features such as a sleek design, clean Android OS, quality camera, and long battery life.
However, the booming business of cheap smartphones such as China's Xiaomi has greatly affected the industry's job market. Smartphone-making giants have been forced to cut about 15,000 jobs this year, according to Quartz. They include Microsoft, Sony, and Blackberry.