New research has highlighted a revolution in how Brits buy phones as punters become more discerning.
Consumers are now more aware that they can buy the phone and the network access separately, and are increasingly doing so.
"Many were totally unaware of the true value of the plan, and this marks a real change," CCS Insight analyst Kester Mann told us. CCS Insight calls the unbundling "cracking the code".
Only 36 per cent of UK SIM-only customers expect to take a traditional bundle-plus-phone deal when their current plan ends, CCS found. Mann noted that this figure is considerably higher than the number of SIM-only customers today, who will upgrade to another SIM-only deal – indicating strong growth for the SIM-only bit of the market. One in 12 phones in use is a second-hand phone.
And there are a variety of fascinating knock-on effects.
Phone fatigue ... 46 per cent of punters say the latest and greatest phones don't wow them
For example, almost 10 per cent of UK punters now buy direct through Amazon. Operators, who have traditionally acted as credit companies, will have to make their bundles more flexible and attractive. High-margin manufacturers may have to make more use of the refurbished channel, or make older models available for longer. In fact, all OEMs have to look at refurb and online.
Mann told us all of these trends are happening already.
"The Amazon figure is surprising and significant. And Amazon plays a large part in the overall 'buying journey'. We found customers who may not have bought the phone through Amazon, but who accessed Amazon in making their buying decision."
The refurbished market is small, at 4 per cent of new purchases, but growing, according to CCS Insight. "We will see more growth," Mann predicted, as buyers look to Argos and eBay*.
Remarkably, Apple's history of premium pricing may count against it. 41 per cent of customers surveyed agreed (ticking somewhat or completely) with the statement that they would never buy an iPhone, compared to 15 per cent who responded the same way for Samsung.
"Cost comes down to that a lot," Mann said. "Large numbers can't afford one." However, Apple has broadened its portfolio with more models at lower price points: the iPhone 6s is still officially on sale and supported, and a refurbished iPhone SE 32GB is only a little over £150 on eBay.
So far, out of the big four mobile networks, only Telefónica's O2 has responded to the tectonic market shift by "unbundling itself", a move it began in earnest in 2013, but one it accelerated last week with its Custom Plans initiative. O2 has removed the straitjacket of requiring customers to take a fixed, long-term plan to get the phone cheaper upfront, and offers much more flexibility with the deals. The minimum length of a contract is now three months, for example, and you no longer have to take the heftiest, most expensive data bundles.
O2 also promotes refurbished models, or "Like New", much more than any of its rivals. Trade-ins will become an increasing part of the retail scene, Mann said.
"A surprisingly high number of respondents who have never traded in a device told us they would consider doing so with their current mobile phone," CCS's white paper revealed.
"O2's role here more than any other helps to drive some of the separation of the SIM and the device. Rightly they're making it a key part of their business proposition."
uSwitch highlighted "flagship fatigue" in 2014, and Huawei arrived in earnest the following year. The impending arrival of much-hyped Chinese giant Xiaomi – which vows never to charge more than a 5 per cent margin on hardware – and the ever-increasing cost of flagships is likely to see the trend accelerate next year.
You may wonder why it took so long. ®
* CCS polled over 2,000 punters in the UK and France in July.