How many smartphones are sold in the United States each year?
Estimate about 110 million new phones a year. About 280 million phones are in use, counting adults, some children and work phones, and people replace them every 2.5 years. At $700 each that is $49 a household per month, below a phone bill, which fits.
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Example answer
50/100
Pretty much everyone has a smartphone now, so it's a huge number. I'd guess around 150 million a year.
The US has about 330 million people. Kids and some older people don't have one. Some people also carry a second phone from their employer. So I'll say there are 280 million phones in use.
People keep a phone about two and a half years. So 280 million divided by 2.5 is 112 million phones a year. So my answer is about 110 million.
What holds it back
The 150 million guess is never used again, and the 280 million phones in use has no build behind it. It also never says whether secondhand phones count as sold.
My method is phones in use divided by how many years a phone is kept. Start with who has one. The US has about 330 million people. With a lifespan of about 80 years that's roughly 4 million at each age, so about 40 million children under 10. I'll assume 1 in 10 of them has a phone, which is 4 million. That leaves 290 million people aged 10 and up, and I'll say 90% have a smartphone. That's 261 million, so 260 million. Some people also carry a second phone from their employer. I'll add 16 million for those, which makes 280 million phones in use. People keep a phone about two and a half years. Carrier deals push an upgrade after two or three, and a lost or broken phone gets replaced sooner, but plenty of people hold on for five. So 280 million divided by 2.5 is 112 million phones a year. So my answer is about 110 million, which feels about right to me.
I'll count new phones sold in a year and leave out secondhand ones. My method is phones in use divided by how many years a phone is kept. Start with who has one. The US has about 330 million people. With a lifespan of about 80 years that's roughly 4 million at each age, so about 40 million children under 10. I'll assume 1 in 10 of them has a phone, which is 4 million. That leaves 290 million people aged 10 and up, and I'll say 90% have a smartphone. Nearly every working adult does, and the gaps are the youngest and the very oldest. That's 261 million, so 260 million. Some people also carry a second phone from their employer. I'll add 16 million for those, 1 in 10 of about 160 million workers, which makes 280 million phones in use. People keep a phone about two and a half years. Carrier deals push an upgrade after two or three, and a lost or broken phone gets replaced sooner, but plenty of people hold on for five. So 280 million divided by 2.5 is 112 million phones a year. Now a test from outside that chain, in dollars. At an average of $700, about 110 million phones is $77 billion, about $590 a household a year. That's around $49 a month, less than a home of two or three people pays for its phone service, which sounds right for the handsets alone. It's a loose test. Handsets would only pass the service bill at about twice my count, so it catches a miss of about two times, nothing smaller. The soft spot is the cycle. At three years it's about 93 million, and at two it's 140 million. Hand-me-downs and refurbished phones pull new sales down, and trade-in deals that shorten the cycle push them up. So I'd say 90 to 140 million, with 110 as my answer.
The numbers, step by step
New smartphones only, from 330 million people, 90% ownership from age 10 up, 4 million younger children, 16 million work phones and a cycle of two and a half years.
- Children under 10 with a phone4 million per age × 10 × 10%
- 4 million
- Owners aged 10 and up(330 million − 40 million) × 90%
- 261 million, rounded to 260 million
- Second phones from work160 million workers × 10%
- 16 million
- Phones in use260 million + 4 million + 16 million
- 280 million
- Sold each year280 million ÷ 2.5 years
- 112 million, called 110 million
- With a three-year cycle280 million ÷ 3 years
- about 93 million
- With a two-year cycle280 million ÷ 2 years
- 140 million
- Dollars a year110 million × $700
- $77 billion
- Dollars per household a month$77 billion ÷ 130 million ÷ 12
- around $49, which is about $590 a year
What the interviewer listens for
- Do you separate phones in use from phones sold in a year?
- Do you say what counts as sold: new only, or secondhand too?
- Can you defend the replacement cycle with a reason?
- Do you test the answer against something outside your chain, such as a household's monthly phone bill, and say how big a miss that test would catch?
Common mistakes
- Answering with the number of phones in use.The question is about yearly sales, so the count has to be divided by how long a phone is kept.
- Using all 330 million people as owners.Most young children have no phone, and leaving them all in overstates the base by tens of millions.
- Picking a one-year replacement cycle because new models launch every year.A launch every year doesn't mean each owner buys every year.
- Forgetting that a replacement phone can be a hand-me-down or a refurbished one, which is a sale of zero new phones.
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