Why it matters: Growing economic strain is causing American consumers and corporations to hold onto aging hardware for longer. Some say this is holding back the economy, but encouraging faster upgrade cycles might not be feasible. Instead, making devices more repairable and upgradeable might save money and increase productivity.
Recent data from the Federal Reserve suggests that investments in new equipment account for much of the productivity gap between corporations in the United States and European countries. Experts recently told CNBC that this is because aging, slow hardware can restrict productivity and innovation. However, high costs present a major obstacle to regular upgrades.
Research from technology solutions provider Diversified indicated that 24% of employees have worked overtime due to problems resulting from obsolete technology. Meanwhile, 88% of employees report that long-in-the-tooth equipment can limit innovation.
However, rising hardware costs might complicate efforts to upgrade. Supply chain shocks and continually shifting tariffs have made hardware prices unpredictable over the past few years. The AI boom has also caused companies to rapidly buy up the latest tech, especially memory. Rising RAM prices might encourage manufacturers to raise prices or discontinue certain products, and the shortage could last into 2027.
Time is another problem. Diversified CEO Jason Kornweiss claimed that large companies take so long to test new technology that something better might have emerged by the time vetting is complete.
The CEO of Thomas Instrumentation, Cassandra Cummings, believes that improving repairability and making technology more modular can address the issue without forcing expensive and time-consuming full-system upgrades. Mature devices with readily available replacement parts and continual software updates can last longer. Meanwhile, more modular hardware can allow companies to upgrade equipment piecemeal rather than all at once.
Recent research also suggests that due to high costs, Americans are hanging onto smartphones for longer than they would like. Furthermore, when they finally do upgrade, it usually isn't to access the latest features.
When Pollfish surveyed 1,000 adults on behalf of reviews.org, respondents said they intended to upgrade every 16 months but actually kept their phones for 22 months and upgraded every 29 months. The median amount that Americans pay for a new phone is $634, and the mean is $600, far less than the cost of flagship models like the iPhone 17 Pro and even less than the latest standard variants.
This is likely why the most popular smartphones in the survey, the iPhone 13, Samsung Galaxy S9, and iPhone 14, are several years old. When users finally do upgrade, it is usually due to faster performance in new models or declining battery life on their old phones. Far fewer respondents said they wanted to own the latest model, gain access to new features, or acquire a better camera.
The economy is pushing US consumers and corporations to cling to outdated hardware
