Why iPhone and Android Phone Prices Will Get Even Higher (cnet.com)

Critics scoffed Apple when the company priced the iPhone X at $1,000. But the way the market has responded to it, there is a good chance that the upcoming flagship smartphones from Apple and those of its rivals -- Samsung, Google, and HTC -- will be pricier. From a column: The critics were wrong. Apple CEO Tim Cook said in July that the iPhone X had outsold every other Apple device in each week since it went on sale Nov. 3, 2017. With strong iPhone X sales, Apple proved that mainstream buyers are willing to pay almost as much, if not more, for their cell phones as they would for a powerful laptop. And with rumors of an even pricier 2018 iPhone X Plus-style phone coming down the pike this September, Apple's moves to usher in the era of the $1,000 phone may just be getting underway. Apple isn't alone in boosting mobile phone prices ever higher. Creeping prices on high-end handsets from Samsung, Huawei and even "value" darling OnePlus signal that price hikes are here to stay. In just two years, the cost of Samsung's Galaxy phone for US buyers has spiked 15.1 percent from the Galaxy S7 in 2016 to this year's Galaxy S9, while the Huawei P series has climbed 33 percent since 2016 -- and that doesn't even account for the existence of a "Pro" model. [...] The trend of increasingly costly handsets in the top tier underscores the cell phone's importance as an everything-device for communication, work, photography and entertainment. And as processing power, camera technology, battery life and internet data speeds improve generation after generation, the value people attach to a phone is sure to swell.

Comments

Why SOME phone prices will go higher

[geschbacher79]

To me, the most interesting development in phones has been the incredibly value in the sub-$300 price, as evidenced by Motorola's various phones, Huawei, Honor, OnePlus, etc.

At the top end, perhaps prices will continue to climb but that certainly doesn't imply all prices will increase. The top tier phones will be luxury items for a certain segment of the market, but the overall trend in terms of phones being shipped has been the amount of value being delivered in the and mid and low price tiers, and that should be heart-warming for consumers. That $1000 phone might be better or the best, but it won't be $700 better than the Moto G6 or similar phone.

Re:Why SOME phone prices will go higher

[atrex]

A thousand dollar phone better last six or seven years (even if you have to drop it off at a service center every couple years to have the battery replaced).

Meanwhile, you're right on that money that phones from the likes of OnePlus continue to pump out features and performance at a price tag fully half that of the major flagships.

Re:Why SOME phone prices will go higher

[Oswald McWeany]

A thousand dollar phone better last six or seven years (even if you have to drop it off at a service center every couple years to have the battery replaced).

Meanwhile, you're right on that money that phones from the likes of OnePlus continue to pump out features and performance at a price tag fully half that of the major flagships.

The kind of person willing to spend $1000 for a top-tier phone is not the kind of person who would be willing to keep the same phone for 7 years. Especially since, two years after it is released there will be $250 phones that are more powerful.

Re:Why SOME phone prices will go higher

[Anubis IV]

Exactly this.

I can't help but feel as if this news is missing the obvious explosion of growth in the value proposition being offered by the low-to-mid portion of the Android market. Whereas in years prior a phone that cost 1/4 that of a flagship phone might provide most people with an equivalent value (i.e. it's about 1/4 as capable as the flagship phone), these days you can get a phone that costs 1/4, yet provides most people with 90% of the value of the flagship. If you're an Android user, there's really no reason to go for the flagship phone unless you're set on getting that last 10%, but for most people, that's well past the point of diminishing returns.

I'm an iPhone user and am almost certainly going to upgrade from my 2013 iPhone to whatever new flagship they launch later this year, but even I wouldn't advocate my choice as a general practice. In years past, it used to be easy advice to tell people to get max(favorite_brand) (with favorite_brand being swapped around depending on if someone was in the Android or Apple ecosystem), since the lesser models all made significant compromises. These days, however, most people are best served by double-checking on what that last 10% actually gets them and whether it's worth the additional cost.

Re: Why SOME phone prices will go higher

[houghi]

You talk about sub 300usd phones as ifthey are cheap. Few years ago that was expensive. Very expensive. The thing the 1000usd phone does is making 300usd look like a bargain.
It isn'r.

Re:Why SOME phone prices will go higher

[Streetlight]

The problem with keeping an Apple phone or some another brands is that OS software updates seem to result in performance degradation, i.e., the hardware can't keep up with new "features" or increased complexity in OS updates. Phones from Google only guarantee OS updates for two years and security patches for three years. The phone makers see a cash cow as users need to update on a two or three year schedule. Those who can afford these schedules will pay the price. Those who can't will make use of much lower priced replacements.

Re:Why SOME phone prices will go higher

[ranton]

A thousand dollar phone better last six or seven years

This argument isn't much different than saying "A $100 meal better keep me full for 3 days".

The phone isn't expensive because of extra durability or a longer shelf life, just like a fancy meal isn't expensive because it keeps you full longer. They are expensive because they are at least subjectively better than other phones (or meals) you could purchase for less.

Re: Why SOME phone prices will go higher

[Kristoph]

You can buy an iPhone and replace it every year, selling your current version for $150-200 less then itâ(TM)s purchase price.

I spend more time with my phone then with any other electronic device I own so $150-200 a year seems like money well spent.

Re:Why SOME phone prices will go higher

[TomGreenhaw]

You are absolutely right, and they do the opposite. They engineer the phones to be fragile. Apple refuses to touch a phone with a third party installed battery and refuses to supply repair parts rendering many phones unrepairable.

Its a great business model if consumers will go along.

Greed

[grumpy-cowboy]

Period

As an Apple shareholder

[Anonymous Coward]

These people are dear to my heart...

There is a huge market here

[SuperKendall]

If you asked the average person today, would they prefer to spend more to get a better laptop, or more to get a better phone - which do you think they would choose?

People are on phones ALL THE TIME now. Good or bad, that's the truth. So why wouldn't you be willing to spend more on something you use more than anything else - more than a laptop, more than TV, more than even driving a car?

If I had to choose today I would greatly prefer an expensive phone and have to get a beater car rather than be forced to get a cheap and under-performing phone.

The phones after all can last many years, so $1k for a phone is a tiny cost considering how much you use it, in relation to the cost over time of something like a car or other things. A phone could easily be $2k or more and if it had the right feature set people would buy it...

Now the real question is, what features will truly be worth more to own? Massive amounts of internal storage might be one, possibly a super battery life phone would be another. Apple has FaceID which allowed for them to reach the $1k premium but the trick will be finding other features that can provide enough value over $600-$800 to justify spending more.

Re: There is a huge market here

[zlives]

there is a constant battle between security and convenience. the convinience of face-id and touch id make basic security available to masses. Apple did not remove other options and you can do without enabling face/touch id. However most people will do without security rather than implement what is easier to use.

People aren't seeing the actual price

[Nidi62]

Very few people are shelling out $1000 straight up for the phone. They all have $20-40 tacked on to their monthly plan payments to pay for the phone. This will also inflate the number of new phone purchases because, once their old phone is almost paid off in 2 years, there's a brand new phone that they can "buy" without paying any more than they already are. Take away payment plans and you won't just see the price of phones drop, you'll see the number of new phones purchased drop as well.

Re:People aren't seeing the actual price

[b0s0z0ku]

"Interest free" -- only problem is that the "base" price is often severely inflated compared to the cash price at B&H or on Amazon.

Re:People aren't seeing the actual price

[swillden]

Very few people are shelling out $1000 straight up for the phone.

True, but I don't think that's the core reason people are willing to pay so much.

I think the core reason is that what people are willing to pay is driven by the value they perceive, and that in turn is closely related to how much they use a thing, and what for. To an increasing percentage of the population, their phone is their sole computing device, and society is increasingly organized around connectivity and computation. To put it another way, look at what people use their phones for, and how many times per day they use them.

I'm something of a luddite (as are many slashdotters, I think), in that I prefer to do most of my online interaction on a physical keyboard, either my laptop or my big, multi-screen desktop with its funky ergonomic keyboard. But most people don't. So nearly all of their non-local (and sometimes local) interpersonal communications for work and play, news, entertainment, banking, information retrieval, etc., etc., etc,. is done on that one device. When you spend so much time using one object, it makes sense to spend whatever you can afford to get the best one you can.

I used to sit on $40 office chairs in my home office. Then one day I thought about the sheer quantity of time I spend with my butt planted in that chair and realized that I would get more value out of money spent on a better chair than many other things I could spend my money on. So I "blew" $600 on an Aeron-style (not actually Herman Miller, but similar, and with a high build quality) ergonomic chair and it has been money very well spent because it eliminated a lot of minor annoyances. Little stuff, like how the mesh seat and back allows airflow so I don't get sweaty, and how it has enough flexibility of positioning that I can always get comfortable. I not only don't regret the choice, when this one wears out (which it shows no sign of doing), $600 will be my price floor for a replacement and I'll be looking for what is available at higher price points.

I get my phones for free so I don't really have to make this decision. But if I did, I suspect I'd have no trouble dropping $1K on a phone that I replace every other year. I'm sure I use it 100 times per day, 365 days per year. A tenth of a penny per use? Makes sense to me.

Visible status marker, that's why

[DNS-and-BIND]

If you're toting the latest phone, you're going to have it out all the time. People will see it. We all know what it costs. It shouts to the world, "I HAVE ENOUGH INCOME TO AFFORD THIS OVERPRICED DONGLE!" It's the same as the peacock's useless tail. Companies have noticed that status is important and people will happily pay to have it. No different from leaving your keys with the BMW logo out on the table for everyone to see while you eat at a restaurant.

Re:Visible status marker, that's why

[magarity]

It's kind of sad how bitter you are. No, I would not like fries with my order.

Re:Visible status marker, that's why

[Jaime2]

If you don't believe wealth signaling is a thing then you aren't paying attention. It's not as obvious as "status symbol", but people notice brand name shoes, bags, jeans, dresses, cars, and phones. We've all come up with rationalizations so we don't feel like judgmental assholes, but we all do it to some extent. I like to think I'm more rational than the typical American, but there's no way I'm going to a job interview not wearing a good suit. There is no functional purpose for the suit, but I know I'm improving my chances of getting the job by looking like I don't need it.

Re:However

[DontBeAMoran]

Apple supports their phones and tablets for a lot more than 24 months.

As an example, iOS 12 will support the following:
iPhones
iPhone X
iPhone 8 Plus
iPhone 8
iPhone 7 Plus
iPhone 7
iPhone 6S
iPhone 6S Plus
iPhone 6
iPhone 6 Plus
iPhone SE
iPhone 5S (First released on 2013-09-20)

iPads
12.9-inch iPad Pro
10.5-inch iPad Pro
9.7-inch iPad Pro
iPad (fifth-gen)
iPad Air 2
iPad Air
iPad Mini 4
iPad Mini 3
iPad Mini 2 (First released on 2013-11-12)

Capitalism

[sdinfoserv]

If you want prices to drop - the answer is simple. Skip the product, buy something else for a cycle. The company will reduce prices in response.

Opposite take from actual user

[SuperKendall]

Apple can go ape themselves with faceid. It's a step back from touchid

Thank you for giving me the opportunity to educate others.

I find what you say to absolutely to be not the case, having had the iPhoneX since launch. How long have you owned or used a FaceID device? My guess is never.

In fact I was planning on buying a newer iPad, but held off my purchase until iPads include FaceID also, I like it so much more.

I find it VASTLY better than touchID. I like how it authenticates without thought, for many uses the device works just like the old days when people did not have passcodes, and of course FaceID is also much more secure than TouchID (by 20x or more).

Monthly payment shoppers

[bobbied]

Ah yes, the monthly payment shoppers are responsible for this...

How many people pay attention to the total cost of that shiny brand new phone with all the bells and whistles? They are sold on MONTHLY price for the most part, and usually sold though the cell phone carrier. These folks look at that $25/month and say WOW! That's cheap, never mind it's for 60 months and that shiny phone will be replaced with a newer model in 24 months and they haven't yet paid for half of it.

This is what happened to cars too. Go talk to a car salesman and I guarantee that you will get the "It's only XX per month!" pitch, no mention of interest rates or payment terms. Most folks don't care and don't find out what that interest rate is or the number of months they will be paying until they are in the finance office. Even then, it's all about the monthly cost, forget what I'm actually paying for this because I get to drive that shiny new car..

So, us strange folks, who actually look at the total costs of financing and are ready and willing to pay cash up front to save bucks when we can, get to look at the "buy it outright" costs and think "who's going to pay that?" Well, I assure you, a whole bunch of folks will if you break it down into small enough monthly payments and that's what carriers and device makers are doing. I don't blame them for doing it and making more money, why not? If people are willing to be sold this way, so be it, just don't expect me to be happy about the prices I have to pay because of it.

Apple made the brilliant move ...

[Qbertino]

... of transitioning from a pure technology brand to a lifestyle and fashion brand with the advent of the iMac. They've been going further down that road ever since.

Today they are so far ahead that they can even drag their heels with us opinion leaders delivering meh hardware with last year's specs and still cap at 1 billion due to iPhones sold everywhere all the time.

That brand power of Apple these days is something it's would kill for.

Comment removed

[account_deleted]

Comment removed based on user account deletion

You know how you get a cheap phone?

[kaatochacha]

Walk into your phone center and tell them "I'm looking for the cheapest phone you've got".
I had to do this back in the Midwest in a town that my family was visiting for funeral preparation. Only Verizon worked there, and none of us had Verizon.
The lady at the counter pulls out an new in box Samsung they just got in, "on discount, I don't know why" . $30 out the door, pay as you go.
Functions perfectly acceptable.
At that price point, I don't care if I drop it in a toilet.

Re:Peculiar choices

[Aqualung812]

I guess we now live in a world where quite a few people are willing to pay top dollar for second rate quality. Let's face it, even the best Bluetooth link doesn't provide the best sound. And it doesn't matter how you massage it, the sensor in a cell phone isn't going to match even a relatively cheap camera.

I can't think of a single thing a microwave oven cooks better than a real oven, skillet, or grill.

So why does nearly every home have a microwave oven? It is fast, and "good enough".

As a photographer, I was taught that the BEST camera is the one you have with you. I have a DSLR, but I don't carry it with me everywhere. My phone camera works far better for that.

When I'm listening to music on an airplane or a volleyball tournament, I'm not looking for reference audio. I'm looking for something that sounds better than the noise I'm hearing without headphones on. Not having to get my headphone cable snagged on something is a very nice plus, and my headphones have 40 hours of use on a charge.

  You're missing the point completely. It isn't about a single measure of quality.

Nothing new

[thunderclees]

Apple is charging what it does to give its iThings implied value and exclusivity
This is why Beats was so attractive to them as it operated on the same model.
The twist is that as most people who buy these things are doing so on credit.
Buying on credit buffers the cost of the device

Re:Who is buying these things?

[ranton]

Most people I know have decided that all the selling points of flagship devices aren't really that big of a deal and are buying cheap phones that can browse, take some crappy pictures, and do messaging.

My wife and I buy the nicest phone available every other year almost entirely for the camera. We like not having to carry a separate camera for photos of our kids, and it's worth an extra $50 per month for us both to have the best camera phone money can buy today, instead of what the top of the line was 2-3 years ago. There are plenty of other nice things about having the best phones available but the camera is the main selling point.

Elephant in the room: Trade war with Apple

[shanen]

Your comment might deserve the "Interesting" mod (though I think it's just a first-post effect), but you are touching the topic so lightly...

The elephant in the room is actually the trade war with China. If China wants to win, and I'm betting they do, then smartphones is where they are going to fight. The story only hinted at it the situation, but just imagine what happens if Xi slaps a YUGE tax on the iPhone. Apple's stock price and trillion dollar market cap would be collateral damage, perhaps only minor damage in the ensuing chaos.

Don't panic. Yet. Wait until you find out that Xi's cronies are shorting Apple.

Actually spent a while searching this discussion for similarly obvious thoughts. There was a time when Slashdot could do better. I especially miss the humor. Not a single comment yet moderated "Funny".

Two Years later: Crap

[Crass Spektakel]

Why buy a $1000 smartphone when you can get a half as good phone for $200? Which still beats every smartphone from two years ago?

This only makes sense if you are [b]NOT[/b] using a smartphone as a tool [b]BUT[/b] as a status symbol. But then, there are some people who are in desperate need of cheap status symbols. Though an apple smartphone is mostly a status symbol for being in the lower class.

Re:Who is buying these things?

[ranton]

I don't believe you. Are you truly distributing the highest quality, highest resolution photos you can take with your phone to everyone? [...] Keep in mind the top of the line phones don't always have the best cameras.

The fact you bring up high resolution as one of the key aspects that makes a camera phone better shows you aren't very interested in photography (that is not meant as an insult). Aspects such as aperture, light sensitivity, auto-focusing quality, and software tools are all very important as well, if not more important. And top of the line phones (iPhone, Galaxy, Pixel) absolutely have the best camera phones available. You may find some $200 phones with better cameras than $500 phones, but none of them are as good as the flagship phones of the major manufacturers.

Your kids aren't going to care about those best-quality images nor will you in 20 years. How many photos of your younger years do you look at? How often? Do you throw them out because you can't see everyone's pores? There are other ways you could spend that $600 which will have a far bigger impact on your kids' and your lives.

I would agree that these photos provide more utility now than in 20 years, but not everything we spend money on is only for the benefit it provides decades from now. My guess is we won't care much about how we spent that $600 in 20 years regardless of how we spent it. Put into a retirement account that would grow into about $40k in real dollars over 30 years, increasing our currently planned retirement fund by less than 2%, providing about $100 of extra income per month. Or put into college funds it would come to a little over $5k per child, less than 10% of our current target. And these are likely the two best alternatives if you are looking at the benefit 20 years from now.

I would also agree with anyone who says you should properly fund your retirement and college savings accounts long before getting a $1000 phone. The same could be said for getting a BMW, a $10k+ family vacation, or many other luxury purchases arguably similar to a flagship phone.