Hidden cost of upgrading your smartphone every year vs. investing in tech
While opting for a new smartphone with every yearly refresh is certainly an appealing prospect, you could instead reap the benefits of long-term investment if you bought shares in the tech companies behind these releases instead.
It might seem like a frivolous comparison when most people need a phone for their daily lives, yet investors would argue that its superfluous to buy the latest tech as soon as it releases and on a yearly basis, with 'hidden costs' racking up over the years.
Finding a balance between buying stocks and buying gadgets can create a pathway where the tech hypothetically pays for itself, saving you far more money that you would ever get back from these annual swaps without missing out on too much.
With tech companies only continuing to grow amid the AI boom, now could possibly be a good time to trade your yearly purchases for annual investments as starting sooner rather than later is always advised.
How much more would you earn from investing?
As reported by Benzinga, if you were to buy the equivalent cost of a new iPhone in Apple shares every single year since 2007 you'd have earned 963.4% more than you put in, with the money needed to buy smartphones totalling $16,080 compared to the value of the shares reaching $170,996.05.
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This represents a return on investment of $154,916.05 across the nearly 20-year period of buying stocks – enough to buy a new iPhone yearly for the next 194 years at the current retail price.
Of course, that would mean that you would be without a phone for this entire period, but you'd have more than enough money left over to buy a new device every couple of years on top of the investments that you've been making.
What this exercise also shows is the massive growth that Apple has experienced since the iPhone launched, as the per-share price jump from $4.37 in 2007 to $246.30 when the iPhone 17 launched last year.
This has already grown to $324.96 on the eve of new iPhone reveals, meaning that even if you started just last year with a $799 investment (equating to 4.06 shares), that would now represent $1,319.34, making you a profit of $520, nearly enough for a new phone altogether.
What are the 'hidden costs' of buying new smartphones?
Outside of the obvious gains that you'd receive from investing instead of buying a new phone outright, you also have to consider the 'hidden' costs that can make a new phone far more expensive in the long-term than its initial price might suggest.
Phones are unfortunately one form of tech that almost immediately lose value as soon as you buy it, with experts indicating that it can drop as much as 40% to 50% across the first 12 months where many people like to upgrade their devices.
This is especially true within a specific 10-day window between announcement and release, but overall you're often stomaching a massive loss on something you've not actually used that much, making it a declining asset compared to the growth you'd often receive from investments.
Additionally, you also have to consider added 'phantom' fees like carrier activation costs and local sales taxes that are added onto the purchase of a phone, and these are non-recoverable so you're effectively throwing money away if you buy a new device on a regular basis.