• Follow us

Internet

You get the iPhone, I’ll get the mortgage - the rising price of smartphones

The only sure things in life are death, taxes and rising smartphone prices, at least if the past few years are anything to go by.

From the likes of the iPhone 4 costing an average of around $500/£500/AU$860 in only 2010, to prices on some phones soaring over $1,900/£1,800/AU$4,500 now with the introduction of newcomers such as the Huawei Mate X and Samsung Galaxy Fold, it can widely be seen that the situation is becoming, on the surface, egregious.

But why has this happened? What has caused these changes, and how can we expect things to pan out in future?

The iPhone X is a premium handset. Image credit: TechRadar

The iPhone X is a premium handset. Image credit: TechRadar

Supply and demand

According to Statista.com, throughout 2010 globally, 304.7 million devices classed as ‘smartphones’ were shipped. In 2018, we see that 1.4 billion units found their way around the world, a significant increase in anyone’s books.

The downside to manufacturers is of course, that almost everyone to whom an expensive smartphone can be sold now already has one, and is likely planning to hang onto it for at least a while. On top of which, the market is saturated with dozens of different players, both local and international.

As such, the game isn’t as lucrative as it once was, so what recourse do publicly-traded manufacturers have to meet the needs of shareholders?

Why, price rises of course - as can be seen in the difference between the iPhone 8 and the iPhone X, devices with many similarities but pitched very differently. Jacking up the cost of entry for an iPhone X ensures that each unit sold brings a greater return, a perfect short-term solution with significant long-term implications.

The Samsung Galaxy Fold takes pricing to a new level. Image credit: TechRadar

The Samsung Galaxy Fold takes pricing to a new level. Image credit: TechRadar

A folding dream

But it’s not just about companies improving the profit margins of their devices. What do the Galaxy Fold and Mate X have in common beside a high price point? They are both the byproduct of millions spent in R&D. What defines the Huawei P30 Pro? A camera zoom unit created by teams of engineers working near the top of their game.

Building a top smartphone in 2019 requires premium materials, precise craftsmanship, a polished software experience and more - the consumer expects everything. And for everything comes a hefty price rise, one which needs to be passed back to Joe Public.

That isn’t to mention the essential marketing spend, and a changing global economy. Whether depreciating currencies, trade wars, inflation or otherwise, the costs of development and manufacturing have only risen - and will likely continue to do so at least throughout the near future.

An impeccably-made, steel-sided iPhone that feels like jewelry in the hand, with a top-of-the-line OLED screen, an incredible camera and a powerful chipset is a wonderful dream, however it is also an expensive one both for the manufacturer and the consumer.

The Samsung Galaxy S10e is a 'budget flagship'. Image credit: TechRadar

The Samsung Galaxy S10e is a 'budget flagship'. Image credit: TechRadar

(Image: © TechRadar)The shape of the future

So the price of manufacturing is rising, the global market is shrinking and the fruits of continued R&D spending are becoming less frequent, what does this mean for the average Joe?

The saturation of the market has seen a change in the idea of what a ‘smartphone’ is. From being something of a luxury commodity in 2010, personified by the ‘cult’ of the iPhone, now a smartphone is something everyone and their grandmother possesses. They simply aren’t special anymore.

And with budget handsets becoming ever better, and budget handset makers becoming ever better at selling them, the reasons for going premium are becoming ever more difficult to articulate.

In trying to give people reasons, manufacturers are needing to spend ever more in the hopes of making a phone that stands out, while also offering alternatives for those who will never be convinced.

As such, in 2019 we have seen the birth of the folding phone, and the beginning of the ‘budget flagship’, with devices such as the Samsung Galaxy S10e.

As more opportunities are seized to define releases by specific price points, so the fragmentation, and commoditization of the smartphone space will continue - like the laptop market from the mid 2000s.

And all the while, that top price bracket will continue to rise, into infinity and beyond.

Read More



Leave A Comment

More News

Latest ITProPortal news

EE reveals launch of UK 5G for businesses 2019-05-22 08:00:40Six cities, five devices and multiple plans for starters.

Nokia CEO says Huawei ban could help its 2019-05-22 07:30:37Block on Huawei tech could be good for its rivals and former partners.

Tech is playing a key role in building 2019-05-22 07:00:40Most companies aren't ready for the workplace of the future.

From the Nigerian prince to London Blue – 2019-05-22 07:00:27Agari recently conducted a deep research campaign into a particularly prolific Nigerian gang we have dubbed London Blue.

Ransomware vs. SMBs – who will prevail in 2019-05-22 06:30:14What are the key steps SMBs should go through to increase their cybersecurity with regards to ransomware?

Kaspersky warns of major rise in DDoS attacks 2019-05-22 06:30:11Hour-long DDoS attacks have surged almost 500 per cent.

How FinOps can help you manage your cloud 2019-05-22 06:00:54IT Pro Portal Q&A with J.R Storment, Co-Founder, Cloudability.

Three key takeaways from the 2019 Verizon Data 2019-05-22 06:00:51XMCyber's Menachem Shafran helps you take advantage of the 2019 Verizon Data Breach Investigations Report.

Microsoft calls for a US GDPR 2019-05-22 06:00:20Tech giant promotes need for federal data legislation.

Disruptive leadership in the era of digital transformation 2019-05-22 05:30:28If you’re not experimenting, you’re falling behind.

The need for next-generation data management: Six key 2019-05-22 05:00:46How to solve the challenges that the explosion of data will pose healthcare.

Micro conversions: Why marketers are taking small steps 2019-05-22 04:30:29The digital world has created a multitude of touch points, signals and clues for marketers to unlock.

TechRadar: Internet news

The best Android apps to download in 2019 2019-05-22 08:48:58Grab the must-have Android apps this year - picked by our Android experts

Get the best iPhone 8 deal on the 2019-05-22 08:26:29This iPhone 8 deal will save you tonnes of money over other Apple devices - a price that makes other iPhone deals look bad.

Smartphone cannibalization deals major blow to PC and 2019-05-22 08:00:58Tablet shipments are down by 19% while PCs by 7.6% in first quarter in GCC because of Smartphone cannibalization

PS5 and Xbox Two could perfectly render creepy 2019-05-22 07:58:15EA shows off what the Frostbite engine is capable of on next-gen hardware with an impressive demo reel.

Analytics for the greater good 2019-05-22 07:30:11SAS's Hugo D’Ulisse explains how analytics can improve decision-making in high-stakes scenarios.

ARM 'stops' all work with Huawei after US 2019-05-22 07:19:24Leaked internal documents suggest chipmaker is halting work with Huawei

5G phones: these are going to be the 2019-05-22 07:19:09Loads of 5G phones are in the works and some have already been launched.

EE targets businesses as it launches 5G 'Phase 2019-05-22 06:59:51EE details partnerships and coverage expansion strategy

What is 5G? Everything you need to know 2019-05-22 06:58:435G networks are here now - here's our guide to all the latest news and more.

Best Apple Watch apps we've used in 2019 2019-05-22 06:52:40Our list of the very best Apple Watch apps for fitness, sleep, travel and more.

Transport for London will collect Wi-Fi data to 2019-05-22 06:51:29TfL says data will be anonymized automatically, with no personal or historical data collected.

OnePlus 7 Pro deals become the first commercially 2019-05-22 06:38:21Superfast speeds on one of the best phones around - OnePlus 7 Pro deals now available in 5G form.


Disclaimer and Notice:WorldProNews.com is not responsible of these news or any information published on this website.