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The effects of price, popularity, and technological sophistication on mobile handset replacement and unit lifetime

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  • Riikonen, Antti
  • Smura, Timo
  • Töyli, Juuso

Abstract

Modeling the sales and replacements of technology products is typically carried out at the aggregate product category level. However, with maturing markets and especially with high-technology products, the ever-increasing variety of differentiating product features calls for more detailed analysis. This article presents evidence on the effect of price, popularity, and technological sophistication on unit replacement and lifetimes of mobile handsets. The analysis is conducted with a unique device model specific dataset from the Finnish market, with monthly mobile handset unit sales from 2003 to 2009 and annual installed bases from 2005 to 2012. The results show that median unit lifetimes decreased during the second half of the study period, indicating a structural change in the mobile handset market. Furthermore, handset models with higher technological sophistication were shown to have explanatory power on unit lifetimes. During the first half of the study period, more popular handset models were also associated with longer unit lifetimes and models with complex flip design with shorter lifetimes.

Suggested Citation

  • Riikonen, Antti & Smura, Timo & Töyli, Juuso, 2016. "The effects of price, popularity, and technological sophistication on mobile handset replacement and unit lifetime," Technological Forecasting and Social Change, Elsevier, vol. 103(C), pages 313-323.
    • Handle: RePEc:eee:tefoso:v:103:y:2016:i:c:p:313-323
    DOI: 10.1016/j.techfore.2015.11.017
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    References listed on IDEAS

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    Cited by:

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    2. Bölen, Mehmet Cem, 2020. "From traditional wristwatch to smartwatch: Understanding the relationship between innovation attributes, switching costs and consumers' switching intention," Technology in Society, Elsevier, vol. 63(C).
    3. Chul-Yong Lee & Sung-Yoon Huh, 2017. "Technology Forecasting Using a Diffusion Model Incorporating Replacement Purchases," Sustainability, MDPI, vol. 9(6), pages 1-14, June.

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