Is it time to see cheaper phones?

The average time a consumer holds on to a smartphone is starting to increase

Published in El Pais, 16 October, 2018

It is fall again which means the season of the new iPhone is here. If the iPhone X screen was too small for you, maybe you would prefer the iPhone XS Max. Of course, you must get the 512gb of storage to go with it and it will be the best $1500 you ever spent. For those who are not Apple fans you can purchase the new Note 9 for $1000 with a pricier 512gb option to be revealed later. Even the famously affordable Huawei has the P20 pro option at over $1000 for those who want to go off the board. Wherever you look for your next phone, I think it is safe to assume your going to spend more than you are used to.

A year ago, Apple unveiled the $1000 iPhone X, and everyone was shocked with the price, but as you can see above, other manufacturers are now making this the new norm with smartphones finally starting to outpace high end computers in pricing. Even with carrier subsidized pricing people are unable to afford the latest phones and one must wonder if consumers are finally saying enough.

One can argue that because they are all doing it we really have no choice but that is not true. The average time a consumer holds on to a smartphone is already starting to increase and with ever rising prices it may not be long before having a phone for 3-4 years becomes the new norm. Even Apple’s most loyal fans who upgrade every year might think twice which of course will hurt overall sales.

Cheaper phones will not even come at a cost of innovation either as evident by the significant margins. The 256gb iPhone XS Max for example roughly costs $443 to make, which makes the $1250 price tag even more puzzling.

If your upset about the latest prices you are not alone but right now the manufacturers are not listening but if we choose to hold on to our phones a little longer, then maybe they will start to realize they have reached their limit. For now take better care of your current phone, you may need it for a lot longer than you thought.

About Matthew Glezos 131 Articles
Matthew is Canadian and has a Master in Business Administration. He has international experience in marketing and strategy. He has a strong interest in technology and combines it with the business side.

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