How smart is your smart phone?

Smart Phones in their array of shapes and sizes have become a modern day everyday essential. Although in relative terms the mobile phone has not long existed in our lives in recent times it has been propelled itself into being an integral part of our day to day functionality. Gone are the days when a mobile phone device was designed to allow you to reach friends and family via the means of calls and text messages and perhaps of course the occasional of game of snake. In our modern day society to not have a Smart Phone is simply not heard of. Quickly the technology contained within these handheld devices have been adopted by young and old to keep us better connected to the world around us. Not only are these devices used for the ability to make calls, send messages (via the means of several different applications no less) but their capabilities go much further than that. Smart phones now enable us to access banking, social networks, emails, news and a whole host of businesses; to name just a few of its functions. With all that in mind it is of little wonder that consumers are consistently demanding more and more from their devices and the lure of a new and upgraded handset rages on year after year. But have you ever stopped to wonder exactly how much you are spending on your smart phone and furthermore how quickly its value is depreciating? The answer to this question in simple terms is probably ‘no’, given the nature in which we as consumers are lured into new phones and the superstar selection of new features it can offer.

There was a time of course when Smart Phone applications or ‘apps’ as they are commonly known were simply not on our radar. As such we were happy to purchase our mobile phones based on their size and connection capabilities. However, it is clearly obvious that the days of being impressed by a colour screen or ability to send a smiley face are clearly over and instead we crave more and more in terms of our phones capabilities. The result of our cravings are some pretty costly handsets, so much so that the vast majority of consumers now buy these handsets via the means of a monthly contract instead of on an outright basis. The newest Smart Phone upon its release could set you back as much as £700.00 and for any mere mortal this is a sizable and considerable sum of money. Instead as consumers we prefer the ability to mask the true cost we are paying for the handset within the monthly repayment we pay the network providers for the service of mobile and internet connection. The reality is, it’s a good job we are happy to repay the cost of handsets in this way because the bleak truth is the value of our handsets is dropping at an alarming rate.

Remember the well-known fact that cars lose 20% of their value the minute you drive away from the showroom and the smiling salesman? Well the percentage lost on Smart Phones is even more shocking. The latest research has shown that Smart Phones can lose up to 65% of their value within a month from their release date; a mere 31 days at most. This means where a phone is purchased for £700.00, after a month it’s worth only £245.00. Furthermore where consumers are paying for the cost of the handset over a period of two years, which nowadays is often the case, by time the period of repayment is up, it would be fair to assume the handset is worth absolutely nothing. Of course in reality this is not true and the likes for Mazuma Mobile will take your ‘old’ handset off your hands for a nominal price but the greater consideration here is whether for the amount we are paying, are we really getting value for our money by upgrading to the newest model of Smart Phone available?

In all honesty and in answer to the above it’s a simple no but will this stop us, probably not. The fact of the matter remains the same that as consumers we demand the best of the best from our Smart Phone purchases and are willing to pay the price literally to get this. We are drawn in by fancy applications and new and exciting capabilities for communicating and whilst ever the manufactures are making them, there is little doubt in anyone’s minds; we will be buying them.

Representative Example: Representative 1286.98% APR on a loan of £300.00 with 5 monthly repayments of £101.03 Total amount repayable £505.13 Annual interest rate (fixed) 290%

Warning: Late repayment can cause you serious money problems - For help, go to moneyadviceservice.org.uk

This article is not intended to contain information about, or advertise, products offered by us but is intended to contain information, give opinions or discuss generally available products/services.

Author: Internal Customer Services Agent