In this blog post, we’ll examine the reasons why people constantly upgrade their smartphones from psychological and social perspectives, and explore the underlying factors behind this consumer behavior.
Since the dawn of the 21st century, humanity has advanced technology at a pace beyond imagination. While progress has been made in countless fields, the information and communications sector, in particular, has undergone changes so profound that they are difficult to compare with the past. It is no exaggeration to say that one of the biggest differences between today and about a decade ago is the widespread adoption of smartphones. Since the advent of smartphones, most traditional cell phones have been replaced by them, and people now enjoy a lifestyle where they can access the internet, search for information, use social media, and communicate via messaging apps anytime, anywhere.
Today in South Korea, smartphones have become virtually indispensable, and people replace them very frequently. In the past, survey results were released showing that South Korea’s smartphone replacement rate was among the highest among OECD countries. So why do South Koreans replace their smartphones so often?
The frequent replacement of smartphones by South Koreans is closely related to their sensitivity to relative gains and losses. Relative gains and losses refer to the psychological tendency to determine one’s level of satisfaction by comparing oneself to others, rather than being satisfied with one’s own achievements. To give a simple example, it’s similar to the mindset where, if a friend receives an expensive designer bag as a gift from their spouse, one feels they should also receive a similar gift.
Research also shows that South Koreans tend to have a relatively stronger tendency toward this comparative mindset compared to people in other countries. The EBS documentary “Mother Shock” compared the brain responses of South Korean and American parents while they played a card game. The results showed that while American parents reacted more strongly to their own scores, South Korean parents reacted more sensitively to the scores of others than to their own. These findings suggest that South Koreans may have a relatively strong tendency to compare themselves with others.
This comparative mindset is easily observable in everyday life. If a neighbor’s child attends a cram school, parents feel they must send their own child as well; if a coworker who joined the company at the same time gets promoted, they feel they must be promoted too. The same applies to smartphone purchases. When someone else buys the latest smartphone, people feel they must buy a model that isn’t inferior, which can further strengthen their intention to purchase.
This sensitivity to relative gains and losses is also linked to the perception of smartphones as social status symbols. Since smartphones are by no means inexpensive, the model chosen is sometimes viewed as a means of displaying economic power or social status. In fact, Wang Sichong, the son of the founder of China’s Wanda Group, once caused a stir by posting a photo on social media of his pet dog wearing an expensive Apple Watch. Additionally, a so-called “smartphone class hierarchy”—which categorizes smartphone models by rank—has been shared online. These phenomena have reinforced the perception that smartphone models are linked to social status.
People who hold this perception may want to upgrade to a better smartphone to appear as though they occupy a higher social position. With the rise of social media, this mindset has spread even more rapidly, and the desire to flaunt one’s financial status or be viewed as superior to others has also intensified. This factor can be seen as one of the reasons people frequently upgrade their smartphones.
However, there are many people who want the latest, expensive smartphones but find it difficult to afford the full retail price. A prime example of a strategy that capitalizes on this consumer psychology is marketing based on the “remanence effect.” The remanence effect refers to the phenomenon where the more difficult it is to obtain something desired, the stronger the desire for it becomes.
A classic example illustrating this is the “chocolate experiment.” Ed O’Brien and Phoebe C. Ellsworth conducted an experiment in which they distributed chocolate to participants. One group was given one piece of chocolate at a time, with the experimenter saying, “Here’s your next piece of chocolate.” The other group was given the last piece of chocolate, with the experimenter emphasizing, “This is the last piece of chocolate.” The results showed that participants who were told it was the last piece rated the chocolate’s taste and preferred it more highly. The fact that they could no longer eat any more actually amplified their desire for it.
Applying this psychological principle to the smartphone market, the latest smartphones are often very expensive at launch, making them difficult to purchase easily. This is when the “resonance effect” kicks in for consumers: the more a product is out of reach due to its high price, the more they want it. As this psychological effect persists, even a slight price drop makes it easier for them to decide to buy. In fact, many smartphone manufacturers and retailers actively leverage this consumer psychology in their marketing strategies.
The phenomenon of smartphone replacement cannot be fully explained by sensitivity to relative gains and losses, the perception of linking smartphones to social status, or the rebound effect that capitalizes on consumers’ economic realities alone. However, I believe these factors significantly influence smartphone purchases. If our values were to shift just a little, South Koreans could protect not only their wallets but also their self-esteem.
