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Android Businesses Google Iphone The Almighty Buck Hardware Technology

Why iPhone and Android Phone Prices Will Get Even Higher (cnet.com) 271

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.
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Why iPhone and Android Phone Prices Will Get Even Higher

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  • by Gregory Eschbacher ( 2878609 ) on Monday August 06, 2018 @10:30AM (#57078556)

    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.

    • by atrex ( 4811433 ) on Monday August 06, 2018 @10:38AM (#57078614)
      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.
      • by Oswald McWeany ( 2428506 ) on Monday August 06, 2018 @10:46AM (#57078692)

        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.

        • 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.

          Yep, I treat my phones like I do my cars. I let some other idiot buy the "new shiny" phone and then I buy a top tier phone that's 1-2 years old for $200-$300 bucks. You're better off buying 3 used phones then keeping a $1000 phone for 7 years.

          • by Tuidjy ( 321055 )

            I'm one of the idiots who buy a high end phone, and then keep it until it stops working. I'm perfectly happy.

            I had a smart phone before the term was coined - I bought a Samsung 'Mobile Intelligent Terminal'. It ran .NET when admitting you liked C# syntax was a faux pas in GNU circles.

            I have had a grand total of two smart phones since. All three work. Yes, seriously. My next to last is being used by my daughter as a music player, and I just booted my Sumsung MIT to see whether it still works. It connec

        • by Streetlight ( 1102081 ) on Monday August 06, 2018 @11:34AM (#57079118) Journal
          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.
        • by Kristoph ( 242780 ) on Monday August 06, 2018 @12:55PM (#57079644)

          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.

      • Comment removed (Score:4, Informative)

        by account_deleted ( 4530225 ) on Monday August 06, 2018 @11:26AM (#57079034)
        Comment removed based on user account deletion
      • my mom is on an iphone 6. I have a spare 6S i'm going to give her soon. she also has a 5S at home that works just fine but i just had an extra phone for her

        old phones work just fine. people are buying new ones

      • Re: (Score:3, Insightful)

        by ranton ( 36917 )

        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.

      • by TomGreenhaw ( 929233 ) on Monday August 06, 2018 @12:55PM (#57079652)
        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.
    • by Anubis IV ( 1279820 ) on Monday August 06, 2018 @10:53AM (#57078762)

      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.

      • Hasn't it always been like that, for pretty much everything? Diminishing returns and all that.

        • That's a great question. I'd agree that eventually, yes, pretty much everything has diminishing returns, but I don't think that's necessarily true for brand new types of products.

          When products are revolutionary (which modern smartphones most certainly were), the value provided can, in some cases, be outsized compared to their cost. In the case of smartphones, they were for many years well worth the additional cost we were paying over lesser (i.e. dumb) phones. The $400ish extra that an early iPhone cost ove

    • Comment removed (Score:4, Insightful)

      by account_deleted ( 4530225 ) on Monday August 06, 2018 @10:59AM (#57078804)
      Comment removed based on user account deletion
      • by zlives ( 2009072 )

        the person looking for a "bargain" can have a very decent and long lasting mobile device at sub 300 range. and if you are looking for a bargain, then you also don't care if its the same device that will last you 3-5 years without issue. without making a fashion/status symbol, the bargain phones are much better than a few years ago's top of the line. then again most bargain phones are subsidized by carriers as "free" anyway so ...

    • Prices will also increase on the low end. What is considered an acceptable price is being determined by the cost of cellular access and not the price of the phone. When cell access accounts for over twice the cost of the phone (over say, 2 years) then the cost of the phone is of no real importance. People will spend more if it implies having a better phone for 2 years.

      I am speaking from the perspective of a Canadian - from a country with some of the most outrageous cellular bills in all the world. Th

    • 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.

      Honor IS the cheapo brand of Huawei. Together with Xiaomi plus a lot of other small(er) players they DO deliver a lot of value and usable devices even under $200 (sometimes on special sales even into double digits).

      However with Oneplus (as mentioned in TFA) the situation is totally different: they START at $500++ and that is if you orde

    • 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

  • If the same, or close enough to the same number of people will buy a phone for $1100, why "only" charge $1000? at some point the upper end of the market will be found but I think its higher than we expect. There is a range of phones just like there is a range of cars and yes, you can get into a BMW for $40k, the top end is like $180. There is still room for the top end phone market to climb but the middle of the pack (iPhone se/7/8, cheaper androids like Motorola and such) are good enough for a ton of peopl

    • Supply and demand assumes rational and knowledgeable consumers, which we don't have. It also assumes a naturally limited supply of widgets, rather than artificial production limits. It also assumes competition rather than price fixing. The flagship and midrange smartphone markets exist in a state of price fixing by the major players. Even OnePlus has jumped on the bandwagon of artificial price inflation to get better treatment from their upstream OEMs.
  • by grumpy-cowboy ( 4342983 ) on Monday August 06, 2018 @10:32AM (#57078574)

    Period

  • by Anonymous Coward

    These people are dear to my heart...

  • by SuperKendall ( 25149 ) on Monday August 06, 2018 @10:37AM (#57078612)

    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.

    • 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?

      The average person is a fucking moron.
  • by Nidi62 ( 1525137 ) on Monday August 06, 2018 @10:41AM (#57078646)
    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.
    • by swillden ( 191260 ) <shawn-ds@willden.org> on Monday August 06, 2018 @11:28AM (#57079056) Journal

      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.

    • Comment removed based on user account deletion
  • 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.
    • It's kind of sad how bitter you are. No, I would not like fries with my order.

    • Phones haven't been a status symbol for years. The person viewing you with the phone doesn't care and the person buying the phone doesn't care what you think. NO ONE CARES.
      • by Jaime2 ( 824950 )
        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 imp
  • by sdinfoserv ( 1793266 ) on Monday August 06, 2018 @10:50AM (#57078734)
    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.
    • Many, many Apple users skip phone cycles, in part because the devices are well built and last a long time, in part because Apple is really good about providing product updates.

      I would argue that more expensive phones are in part a response to this, because Apple is trying to make a device advanced enough to get people to switch away from older phones to a newer device rather than seeing a customer getting a really usable model from a year or two earlier at a lower price.

    • I did that, and in response they killed the product line.

      I have a Nexus 5. I skipped the 5X because it didn't seem like a significant upgrade. Then they killed off the Nexus line for the twice-as-pricey Pixel, now on its second iteration. Now I actually need to upgrade, and I can't find any good 5", ~$300 phones with minimal OS changes and good long-term support. The Nokia 5.1 looks like just what I need, but it hasn't hit the US market yet.

  • 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.

    So the tunes on my old iPhone 4S physically plugged into a good-quality outdoor speaker, are a consistent "people's choice" over anything linked to that same speaker via Bluetooth. And my primitive Nik

    • by Aqualung812 ( 959532 ) on Monday August 06, 2018 @12:15PM (#57079412)

      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.

  • by bobbied ( 2522392 ) on Monday August 06, 2018 @11:08AM (#57078884)

    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.

  • Latest gen flagship phones are having trouble differentiating themselves. Cameras have reached the point where the newest and best features are mostly marketing ploys and not that valuable. The processors are fast enough for the kinds of things one would want to use a phone for. The screens have high enough pixel density. The phones are relatively robust and the battery life is acceptable. The new flagships are trying to race to the bottom with thinner bezels and thinner phones, but phones are already t
  • by Qbertino ( 265505 ) <moiraNO@SPAMmodparlor.com> on Monday August 06, 2018 @11:13AM (#57078940)

    ... 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.

    • "opinion leaders"? (Score:2, Insightful)

      by Brannon ( 221550 )
      That's hilarious. The vast majority of smartphone users have no idea that the Slashdot crowd exists and couldn't care less. Apple has a $1T market cap specifically because they ignore any opinions coming from this site.
  • Prices will go up, until people reach a point where they can consider their phone good enough. Where the demand for a new phone is becomes much smaller. Then we can allow the cost of components to go down to offer cheaper phones.

    Right now there is no race to the bottom for phones. As I expect many of these companies have learned from the PC industry from the late 1990's and early 2000's

    Where PC manufactures stopped focusing on quality and focused on price. Cheap-o keyboards and mice, Celeron processors (

  • I priced getting an iPhone but the price vs capabilities vs need vs ROI just was not there. I can even write the cost off on my business.
    Granted my cell phone needs are very basic, calls and text. I write apps for iOS devices but don't have a need or desire to use any apps.
    Apple will be the last to have problems, most in that world have to much money and just don't care about cost. It is more about status than needs. But I would have to think the device bubble will burst at some point. After all how long
    • A cell phone or land line phone is a necessary item these days but I'm not sure a cell phone is an investment but rather an expense, especially if you're using it for pleasure and not for business. An investment is purchased in order to increase one's wealth whereas a phone is a necessary tool. If you're not creating income you wouldn't get without the phone, then I guess it might be considered an investment, but for most folks that's not the case.
  • Between the S7 and S9 developments which may justify the price were to be seen. E.g. the S9 supports Dex which effectively turns your phone into the brains of a desktop ala laptop in docking station.

    I would gladly pay well over $1000 for a phone that replaces my laptop.

    Meanwhile the iPhone X unlocks automagically when you stare at the ugly notch and sends animated poo. Progress!

    • What's the point of a phone that docks into a docking station? The station is effectively the size and weight of a laptop -- may as well just get the laptop and call it a day.
  • ...to use the same phone I have now until the sun burns out...

  • ...should be on pricing and making the phones less expensive, not more. They already have enough doodads and features. When an iPhone X costs roughyly 1/40 of the average American's gross income, that's way too much. Even the lesser models at 1/60 need to come down.

  • This doesn't surprise me. For many people a call phone is used much more than a laptop, so arguably if you're going to spend $1,000 on tech there's more return on the cell phone than a laptop. Don't think of it as "just a phone" - think of it as the personal electronics that most consumers use more than any other, as a camera, camcorder, web browser, email, etc. Heck, if you ask 'kids' now, most of them care a lot more about their cell phone than laptop or car!

    on top of that, with the move towards pricing p

    • Except that usability doesn't actually increase beyond a certain price point. $200 phones often have the same basic hardware as $1000 phones.

      To use the car analogy, a Corolla is often a better car and more reliable than a Lamborghini.

  • by kaatochacha ( 651922 ) on Monday August 06, 2018 @11:56AM (#57079290)

    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.

  • I'm not sure if we've really hit the upper limit for a device that most people use dozens to hundreds of times a day. Seems like a bargain if you compare it to a Macintosh 512K from 1984 that was $2,495.00 (equivalent to $6,169.90 today), and that you weren't likely to use a computer like that more than once or twice a day.

    PS - before anyone says PCs were generally cheaper than Macs. An IBM XT that was well equipped was still quite expensive when it was released: "1983: March - IBM announces the IBM PC XT,

  • I'm still using my wife's old rose gold (pink) iPhone 6S. It works well, does everything I need it to do. I drop it all the time because that thing is so damn slippery. I don't see a need to upgrade because unlike most people it's not my only computing device.

  • 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

  • Prices reflect what people are willing to pay.

    If there is a burgeoning market for $4-figure phones, it is because there are enough people willing to drop a $k for a mobile device. Whether they get that amount of value from it (compared to the amount of value they would get from a $500 phone, or a $200 one) doesn't really enter the equation.

    For many people the value is in the having - and ensuring that everyone knows they have it. Pure status.

  • Apple customers are not mainstream customers by any stretch of the imagination. Apple's always been an elitist product for elitists. The reason smart phones have had wide adoption isn't because the devices are valuable, but because they've provided a way for the poor to get online, and effectively closed to digital divide. At least in america. The high end of phones is the high end of phones. But hiking the price of all phones, through trickle down effect will hurt adoption across the board. It's too early

  • by Crass Spektakel ( 4597 ) on Monday August 06, 2018 @05:12PM (#57081366) Homepage

    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.

If all else fails, lower your standards.

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