So it’s clear that high-end mobile phones are slowly becoming more expensive over the years but why ?
We’ll take a look at some possible reasons of why on this article. we’ve already covered the fascinating stories of the very first mobile phone in 1983 and the first smartphone released in 1994, we saw that the prices were nine thousand two hundred dollars and one thousand eight hundred dollars respectively, so what we’re witnessing right now isn’t the first time that smartphones have been really expensive after the 1990s.
However mobile phones did fall in price around the world as we enjoyed accessible mobile communication but as the 2000s rolled around our phones began to do more than just communicate and with the extra functionality came higher prices, the prices really started to climb when fully capacitive touchscreen smartphones hit the market.
the original iPhone in 2007 set the bar at $600 and since then the prices of subsequent
iPhones and high-end Android devices have steadily been climbing.
Google’s pixel line stands out as great valley that also begs the question are the other top brands overcharging to gain more of a profit possibly to appear stockholders this may
be partly true but as you’ll see in this article .
Why the prices are increasing ?
we’ll, by using mostly Samsung and Apple as examples, the Samsung Galaxy Note 8 starts at 930 US Dollars and the iPhone 10 starts at 1,000 u.s. dollars both record-breaking prices. unfortunately when you include sales tax foreign exchange rates and trade tariffs the prices can explode the iPhone is 25% higher in Australia 30% more expensive in China 32% more expensive in the UK and 47% more expensive in Hungary where the cheapest version of the iPhone 10 costs 1500 u.s. dollars. spending that much money on the lowest configuration of an iPhone is something that the world has never seen before so let’s dig right into it here are three reasons for the increases in price.
Top smartphones are costing more to make the smartphone industry is one of the only sectors where consumers constantly expect innovation and new features.
every year manufacturers have to overcome space constraints strive to reduce power consumption while providing more features and a better user experience this all doesn’t come for free every new innovation demands engineering knowledge testing and calculated design choices a simple measure of the raw cost of a phone is its bill of materials basically a list of the components and their prices used to create the device .
Here’s a chart by Android Authority showing the Bill of Materials for the Galaxy S series over the years as you can see there’s an upward trend if we look at the sales prices of the Galaxy S series is the same deal there’s an upward trend in both of them but in 2017 something interesting did happen the SI was the most expensive phone to make by far it costed an estimated 307 US dollars to make 43 dollars higher than the s7 and 36 dollars higher than the s7 edge according to Andrew Russ wheeler of H is market quote the higher total biller materials for the galaxy si seems to be part of a trend that reflects something of an arms race and features among Apple,Samsung and other phone manufacturers as they all try to add new and distinguishing hardware features end, so in essence the weapons of this arms race are the phone components and the battle is for your wallet
The build materials for the iPhone 10 is said to be 412 dollars also by far the most expensive to get the total cost of manufacturing the phones you need to add in research and development needed for testing new features advertising costs manufacturing costs administrative costs and a pushed outdo their competitor all within a one to two year product’s lifecycle.
Taking this into consideration it becomes easy to see how prices can begin to creep up .
Smartphones are becoming more capable
it’s obvious that phones are getting more powerful today’s top smartphones in some respect have as much grunt as a laptop from just a few years ago in fact the Qualcomm Snapdragon 835 chip which is used in most high-end smartphones by Samsung HTC LG Sony and Nokia is so powerful that it’s now being used in full Windows 10 pcs a field normally dominated by Intel and AMD Asus Lenovo and HP have all signed up to use the new mobile chip in their computers this machine is running Windows 10 on a Qualcomm Snapdragon processor, you can see this is running 64-bit Windows 10 Enterprise Edition with four gigabytes of RAM I’ll pull up the task manager so you can see the full power of the Qualcomm Snapdragon processor with its four cores in action this is Adobe’s Photoshop running great on a Qualcomm processor we made zero changes to the app it runs perfectly
I’ll select a radial blur filter on the ninja cat just to show you that this is real photo shop with all the functionality you would expect another tough performance test on any PC is playing a game here we have the popular Windows 10 game World of Tanks blitz as you can see it runs great super smooth but these new powerful chips comes capabilities for features such as augmented reality and virtual reality all of this as well as new concepts like the iPhones neural engine to help with recognizing speech and images as well as dual camera setups to allow for more options during photos and videos all our incentives for people to pay a higher price for their mobile device these extra capabilities feed into the third reason.
Supply and demand
At the end of the day it all comes down to supply and demand as long as people are willing to pay high prices for mobile power and all of these new features the manufacturers can sell them at these high prices in addition there are numerous studies that have revealed
that psychological dependence on smartphones is quite widespread and within that group there’s a segment of people that always want up-to-date technology it’s just part of their
personality nobody actually has to upgrade their phones every one or two years but millions of people do because of this reason high prices can be sustained but the question is if manufacturers keep increasing the price
what is the threshold at which the customers say no brand perception also has a part to plan on the demand side if a person is fond of the Apple or Samsung brand they’re more likely to see the cost is worth it it’s not all bad though there’s a growing number of alternative options some of the mid-range phones really aren’t that bad anymore the
Chinese brand Huawei now the world’s second largest smartphone manufacturer can provide much cheaper alternatives the same goes for Xiaomi Google’s pixel lineup and Oppo further to this if the goal of your phone is just to get the job done a two year old high-end phone is still decent one final note to take away is that the actual average price of smartphones is actually going down across all of the world except for the United States one interpretation of this data is that although the highest models are going up in price the rest of the market is getting more efficient at sourcing parts and the manufacturing process so they’re able to pass those savings on to the consumer as you’ve seen the high-end models are always trying new things and paving the and innovation is generally expensive.
in conclusion smartphones have definitely come a long way since 1994 and the capabilities have just exploded over the past decade the cost of having the very best in mobile technology is going up but when we demand so much from our devices it’s no surprise so what do you guys think do you agree or disagree with the reasons listed in this article
what’s the price threshold for you when it comes to buying a new phone anyway that’s it I hope you enjoyed this article .