Flagship smartphone costs are spiraling uncontrolled

Flagship smartphone prices are out of control and we wonder why the upgrade cycle is getting longer for the average user. In the past – which we hardly remember – it was normal to update your smartphone every year. Especially when you’ve extended or renewed your carrier contracts and received incentives or subsidies.

Then Apple came along and killed that off (no, Samsung isn’t innocent either) as the cycle slowly but surely got longer and longer. According to Strategy Analytics for 2019, the aforementioned upgrade cycle is 33 months and currently only a little more than three years.

And it kind of makes sense. If you’re spending more than $ 1,000 on a smartphone, you’ll hold onto it for as long as you can (or as long as it serves its purpose, and the manufacturer does nothing to slow it down or damage the battery to get you to upgrade) to force). After we mention batteries, it’s not just another way to force them to upgrade once the battery starts to degrade.

Speaking of the $ 1,000 threshold, Apple is also responsible for that. Why? Because they could do it. If consumers had left these phones on the shelves, Apple or another company would have thought twice about breaking the barrier.

But today we’re nearing the $ 1,500 mark, and these phones are going to sell themselves at the outrageous and unaffordable smartphone prices, driving the price higher and higher. Just recently, OPPO announced the Find X3 Pro. They charge £ 1,099 for the thing that is a hair over $ 1,500.

The niche products

It’s a stretch, but you could somehow justify the insane price tag for the niche products. These are leaflets (the Mate X2 costs up to $ 2,959, the Galaxy Z Fold 2 is priced at $ 1,999), these are the Porsche Designs, Lamborghini, and McLaren editions, as well as the other exclusive products.

You see, these are not for everyone. The first category is pushing the limits of technology, while the second category is mostly pure branding.

You don’t have to buy these products, but when it comes to regular smartphones, you have to pay the highest price for a flagship.

The insanely expensive flagship

Yes, we understand that these smartphones are more powerful than computers a few years ago. But these computers didn’t cost that much. Granted, anything smaller in technology is usually more expensive (if only smartphones are a decent size).

They say we make decisions emotionally and rationalize them with logic. But logically, a smartphone at $ 1,500 is twice as good as a still expensive phone at $ 750? Of course not. Often they are not even much better from generation to generation if the successor is more expensive than the predecessor.

There are two things to consider here: first, manufacturers throw in everything, including the kitchen sink, with hardware components and features that you’re likely to use once or twice, and then forget about them. That increases the price. Second, the profit margins are huge. Just think about it: in 2018, every time you bought an iPhone XS Max for $ 1,250, you made Apple $ 800 richer. That’s because Apple only cost $ 450 to make.

iPhone 12? Almost 70% profit margin. And don’t think for a second that Apple is alone in this. They may be the company that makes the most profit from smartphones, but they are closely followed by Samsung, HUAWEI, and OPPO.

Why these crazy smartphone prices?

Simply put, as I indicated at the beginning: because they can. Because they manage to generate demand, and ultimately because consumers buy.

And as outrageous as it is, it is a vicious circle and a paradox. It used to be perfectly fine to buy a new $ 500 phone every year. That’s $ 1,500 over three years, and that’s exactly what we give, give, or take every three years today. After three years, that’s pretty evenly balanced.

Have smartphone prices increased because smartphone owners forced companies to raise them because we lengthened the cycle? Or have manufacturers forced us to extend the cycle because phones are getting more expensive?

Let us talk about it. What do you think of phone pricing? Justified? Outrageous? Drop us a comment below.

Thank you for reading! Welcome to the editorial desk!

Anton D. Nagy

Anton is the editor-in-chief of Pocketnow. As a publication manager, he would like to bring Pocketnow even closer to you. His vision is primarily focused and focused on the audience. Anton’s goal, which has been adopted by the entire team, is to turn Pocketnow into a reference media company.

Contact: [email protected]

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