A look at the reasons for the rise in the global price of smartphones in the last five years

A look at the reasons for the rise in the global price of smartphones in the last five years

A look at the reasons for the rise in the global price of smartphones in the last five years

EMGblog.com: There is no doubt that today the price of smartphones is very high. It is high, so that the purchase of flagship phones can cost more than 1,500 dollars and in some cases 2,000 dollars; A price that simply exceeds the cost of buying some mid-range laptops or even 4K TVs with a 75-inch screen. This is despite the fact that only five years ago, smartphones were available at a reasonable price, around 600 or 700 dollars. Now, the increase in the price of smartphones more than twice in a not so long period, brings to mind the question of what is the reason for this increase and will buyers be willing to pay such an exorbitant price for smartphones in the future?

Apple iPhone 11 Pro and iPhone 11 Pro Max

The androidauthority website recently

How did we get to the current situation?

Let’s go to 2007 and the release of the first iPhone, come back as one of the first expensive phones of our time. At that time, the price of $599 for a smartphone was considered very high; As Steve Ballmer, CEO of Microsoft, called this pricing method “Apple Madness”. In an interview with USA Today in 2007, he said: “The iPhone has no chance of gaining a significant share of the market. [Absolutely] no chance.” “[Apple] may make a lot of money, but if you actually look at the 1.3 billion phones sold, I’d rather have our software in 60, 70 or 80 percent of those [phones] than 2 or 3,” he added. The percentage that will probably be in Apple’s possession.”

Steve Ballmer CEO Former Microsoft

But contrary to Ballmer’s prediction, consumers bought the iPhone at the same price, and we all know what ultimately happened to the mobile sector Microsoft, RIM Company, Nokia and Palm came along. Apple iPhones with the most storage space now at a price of They sell for around $1,600. Meanwhile, this company continues to increase the price of its phones slowly. The Cupertino giant since 2014 and after the introduction of iPhone 6 in two standard and plus versions (with differences in body dimensions, weight, size and resolution of the screen and battery life) allows you to increase the price in the more advanced model of the phone and by adding more features, this price has justified the higher.

Of course, Apple is not the only company that has been on the path of price increase in recent years. Google More than 10 years ago and at the beginning of 2010, the phone Nexus One with HTC and at a price of around $529 put on the market Then in the next smartphones, namely Nexus S and Galaxy Nexus slightly reduced the prices and in Nexus, this company 6 increased the price of its smartphones and in the first step, it raised the price level for the basic 32GB version of this product to $649. Currently, the 128 GB sample Pixel 4 XL is sold at a price of $999, which although its price is not so high compared to the iPhone, but it is still among the expensive products.

Google Pixel 4 and Pixel 4 XL

Similarly, Samsung as another leading manufacturer of flagship phones in the world has followed the same trend and the 5G version of the smartphone Galaxy S20 Ultra will be launched at a price of $1,599. In addition, the price of the foldable smartphone Galaxy Fold , another high-end product of the Korean company, was also set at a very high price of $1,980 last year.

Hardware: the most important factor in the price of smartphones

According to Avi Greengart, director and senior analyst at research firm Techsponential, the smartphone market is completely saturated and consumers are keeping their phones longer. Therefore, manufacturers try to get the most amount from each purchase. Although this is considered opportunistic from one point of view, but on the other hand, it reflects customer demand: buying a smartphone is considered a long-term investment, which today, compared to a few years ago, is used more than anything and in most tasks. These conditions help that in rich markets such as the United States of America, operators pay their expenses without any interest in a period of three years.”

Of course, there are also return trends. For example, Greengart points out that manufacturers have responded to $1,600 smartphones by launching high-end phones in the $800 price range. Oneplus company is one of the best examples in this field. . It should be noted that the best-selling phones of Apple, Samsung and other manufacturers are not necessarily their most expensive products, but affordable examples such as iPhone 11 and Galaxy A50.

Finally, it must be remembered that the customer gets what he paid for, and this leads to the discussion of current smartphone hardware and costs.

From Greengart’s point of view, today’s smartphone screens are not only bigger and better quality than they were a few years ago, but they are protected by shatter-resistant glass and housed in more stable frames with very small bezels. . Also, the new products have a larger battery and their storage space has increased significantly. Today’s silicon chips are highly advanced and include chipsets that rival laptops in terms of performance, more memory, and powerful graphics and AI chips. With more antennas, the phones are adapted to wider networks globally, while also being equipped with multiple cameras that have depth-sensing capabilities. In addition, they use facilities such as biometric and security sensors. Also, in today’s most expensive phones, new technologies such as flexible screens, modems with a wide frequency band, periscopic cameras, LiDAR scanners to detect light and movement trajectory, and fifth generation and mmWave modems are used, which naturally increases the price of this category of products.

Other factors involved in the price of smartphones

Besides the hardware, the software aspect of smartphones is also effective in increasing their price. Although Google offers the Android platform for free, it does not mean that the features provided by the manufacturers will be free of charge. For example, Samsung has spent a lot of money to design One UI based on Android. Similarly, not only Huawei, but other smartphone manufacturers including LG, Motorola, Sony and Xiaomi have also had to spend money to develop their own user interface, design launchers and applications. This is, of course, apart from services such as Siri, digital assistant Google Assistant and Bixby are creating their own fees for smartphone manufacturers.

Tech analyst Carolina Milanesi points to artificial intelligence as an example of new technologies and ways of applying them to devices, along with the associated data center costs, which despite Not all companies use it, but it affects the cost of obtaining a license and using the service. In addition, rights related to patents and patents are another cost-generating aspect that can see an increase in price. As a result, it is natural that hardware manufacturers do not take these costs and direct them to the consumer in some way.

Possibility of price reduction?

It is difficult to imagine a decrease in the price of smartphones, and in fact, we should expect the price of high-end flagship smartphones to continue its upward trend. An increase imposed on manufacturers in both hardware and software costs.

Hence, those who can’t afford to pay $50 a month for $1,200 phones will have to settle for a plethora of $600-$900 phones. The good news is that there is no shortage in this price range because manufacturers like Oneplus, LG, Xiaomi and even Motorola and Nokia has launched a flood of new devices in the mentioned price range, which in key and important aspects are similar to flagship phones such as the Galaxy Note series Samsung, they look high quality and in terms of hardware and software, they are worth buying.

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