How do you decide when to upgrade your smartphone?

With Samsung's Galaxy Note 8 hitting the shelves and Apple's iPhone 8 not far behind, how will you decide when it's time to give your current phone the flick?

Aussies replace their smartphones every three years, according to finder.com.au, but of course that's only an average figure. Some of us always upgrade our phone at the end of our 12 or 24-month contract – perhaps feeling like we're getting a "free" phone even though the cost is built into the contract compared to a SIM-only plan.

At the other end of the spectrum, some people would hang on to their phones for much longer than three years. They'll stick with a handset until the screen breaks, the battery dies or it becomes painfully sluggish when performing simple day to day tasks – just like some people drive their old car into the ground before replacing it.

Do you only buy a new smartphone when the old one bites the dust? Photo: Ben Margot

Do you only buy a new smartphone when the old one bites the dust? Photo: Ben Margot

I'd say there's a rough correlation between a handset's price tag and how often you replace it. If you feel the need to drop $1000 on this year's flagship Apple or Android smartphone then you'll probably be prepared to do so again in a year or two, even if the old handset is still meeting your needs, to ensure you've always got the latest and greatest.

You might even sell your old handset to offset the cost of the upgrade, Finder breaks down a few options for those who are happy to part with their old phone rather than handing it down to someone.

On the other hand if you're satisfied with a sub-$500 Android handset then you're probably not going to feel the need to upgrade just because a newer model comes along with a few extra bells and whistles.

Finder's figures don't break down the upgrade stats by price tag, but the age demographics are still telling. It seems that 55% of Gen Y smartphone owners replace their handset every two years or less, dropping to 38% for Gen X and 22% for Baby Boomers. It's not unreasonable to assume that Gen Y smartphone owners tend to favour more expensive handsets than Baby Boomers.

Those Baby Boomer figures would also be boosted by those who were forced to upgrade by Australia's 2G shutdown, throwing away their old Nokia 3200 and stepping up to a basic smartphone like the Moto G3. If they hung onto their last phone for a decade or more, they won't be in a rush to jump on the smartphone upgrade cycle.

Your priorities also change over time. As a Gen Xer who sits in the middle, over the years I've found myself replacing my phone a bit less often and my car more often.

Another factor is that a two year-old smartphone isn't as terrible as it once was. By the time the iPhone 4 hit the shelves, the iPhone 3 was struggling to keep up. That won't be the case with the iPhone 7 when the iPhone 8 arrives, even if the 7 groans a little under the first few releases of iOS11 – perhaps a deliberate ploy by Apple to encourage you to upgrade.

We went through the same thing with desktop computers and later notebooks. There was a time when a two year-old PC was painfully slow but that's no longer the case so we replace them less often.

Is the smartphone in your pocket looking a little long in the tooth? How will you decide when to retire it?