The Mystery of Ever-Increasing Phone Prices

September 3, 2019BusinessNo Comments

Discover The Article

1 On the Business Side
2 On the Consumer Side
3 Will the Trend Continue?

As I sit in this coffee shop, typing out the article you’re reading now, Samsung is preparing for their presentation of the Note 10, Samsung’s newest flagship smartphone. Suffice to say, I—and the tech community—are pretty excited. However, there is one characteristic of the Note 10 series that have people wary: price

While the prices won’t be confirmed until a few hours from me writing this, the rumored prices are high, with the base Note 10 costing $949 and the Note 10+ costing $1,099. Considering that the S10+ released earlier this year cost $1,000, these prices are extravagant, though the Note series has always been a bit more expensive due to extra features and bigger screens.

However, the base Note 10 is rumored to not even be on par with the base S10, the Note 10 only containing a 1080p display! Yet it will be more expensive!

So, why are modern smartphones breaking the $1,000 threshold? What happened to a flagship phone costing $800, $900 at most? Back in 2017, the Samsung S8+ only cost $850, a full $150 less!

What went wrong?

On the Business Side

It’s easy to simplify this topic by shouting “corporations are greedy!”, but there’s more to the story than greed. Sure, businesses want your money, it doesn’t take an essay to figure that out. Throwing away the topic for a surface-level answer though? Not on my watch!

The main cause is the fact that phones don’t sell like hot cakes. There are a select few who are buying the newest phone every year, but most treat their phone as a long-term investment, keeping it for 2-4 years before replacing it.

Due to this, manufacturer may start experiencing lower sales than predicted. However, raising prices to increase profit is a valid, logical option for these manufacturers; why try to sell 10,000 when you can increase the price a little bit and make the same profit from 8,000?

On the Consumer Side

While businesses claim legitimate reason for increasing prices, the consumer can’t say the same. The only reason manufacturers keep increasing phone prices is because people will pay for it without question.

Earlier, I referenced a certain subset of people that are willing to purchase a new phone every year—sometimes multiple times a year—and this subset is anything but small.

Last year, when Apple released the iPhone XS, first week sales landed at a gigantic 9.46m. Some of those were definitely people who needed replacing of their old phone, but I’m sure at least one million of those phones were people who just wanted the newest iPhone.

I’m not bashing the practice of buying a new phone, trust me. I had an iPhone X and bought the Samsung S10 anyways, so I am nothing but guilty. However, is it hard to see why manufacturers are content with raising prices little by little every year?

Will the Trend Continue?

As long as consumers continue to buy what manufacturers sell, prices will proceed to climb higher and higher, like Netflix’s subscription prices. But unlike phone prices, Netflix’s subscription can be stopped anytime, and you may even save some more money since you won’t need that VPN you’ve been using for Netflix.

Hey, maybe we’ll even break the $2,000 threshold one day, and no, the Galaxy Fold pricing doesn’t count because 1.) it’s not even released and 2.) New technology always charges an early-adoption fee.

There is a dash of good news though, and that is budget phones becoming prominent once again in the market. Major phone manufacturers like Samsung and Apple offer a watered-down version of their flagship models, i.e. the S10e and iPhone XR. Also, manufacturers such as LG, OnePlus, and once again, Samsung, offer phones around the $4-500 mark that offer decent speeds and displays, though of course some quality and features will be suffered.

If you’re sick of having to drop 4 digits on a new phone, picking a budget phone is a good option, though don’t go too cheap. You’ll be using your phone every day, so make sure you won’t get frustrated using it.

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