Why are flagship smartphones more expensive?

Do you remember the period when only phones made of high-quality materials like titanium, gold plated, or ruby ​​and sapphire-like new 'allowed' cost over $ 1,000?Yes, thanks to Apple and Samsung, that 'beautiful' days have passed into the past.

1. 2018 smartphone market: Winners and losers

The starting price of 999 USD that these two manufacturers offered for their top two products is iPhone XS and Galaxy Note 9 which pushes the button to pave the way for the increase of flagship smartphones to surpass the 'boundary' of 1000 USD. which existed as a delimitation between luxury phones and ordinary phones.These manufacturers are very smart, they increase storage capacity for the device and use it as an excuse to increase the price.For example: If you want to own an iPhone XS with 512GB of storage, you will have to pay $ 1,349 - 35% more than the starting price.In the UK, this high-end phone costs £ 1,349 and in Australia is $ 2,199, not to mention the iPhone XS Max is even moreexpensive.

1. New iPhone Xs, Xs max and Xr prices are released by Apple

But the problem does not end there.The fact that leading manufacturers raise the price of flagship has created a new wave of raising product prices in lesser-known manufacturers like Google, Huawei and OnePlus . and seems to be becoming a trend. .

High-end phones are not the only products with an increase in selling prices.In the lower segment, we have seen the same thing that the iPhone XR costs 7% higher than last year's iPhone 8 version and 15% compared to iPhone 7. Meanwhile, a product with few names The older OnePlus 6T also has a 3.8% increase in price compared to the OnePlus 6 model released six months ago and a total increase of 37.6% over the past two years.

1. The face detection feature of the OnePlus 6 is easily overcome by a printed photo

Statistics data from 11 phones were launched in the period from 2016 to 2018, showing the trend of steadily increasing in the selling price of high-end smartphones, and expected by experts and devices. This will increase to a record in 2019 and many years later.Apple certainly has adopted this model for different models in its product lines, such as price increases on the new iPad Pro and MacBook Air compared to previous models and created a large fluctuation between selling prices. of the base version and the version using higher memory storage.

It is worth mentioning that this increase does not affect sales of products, but even sales increase in some cases.So do we have to bear some responsibility for this?

When Apple broke the $ 1,000 'red line' on the iPhone X in 2017, critics did not regret taunting its exorbitant price, but in response, the iPhone X quickly became a Among Apple 's bestselling products, especially in less than a month since it was launched on November 3, 2017, Apple has sold about 15 million iPhone Xs, including 6 million. in Black Friday week.These are really 'silent' numbers of critics.And other manufacturers have followed Apple's lead, especially Samsung.

The trend of high-end handsets has become increasingly expensive, especially smartphones that have emphasized the importance of this device as an indispensable item in the life of mankind today.And when processing power, camera technology, battery life and internet data transfer rates are increasingly improved from generation to generation, the value that people attach to their phones I will definitely increase.

"Even consumers are willing to pay premium for mobile phones because this is said to be one of the most important products in their lives," said Ben Wood, CCS Insight research analyst. determined.

However, saying it must be said again.Important components on smartphones such as processors and cameras are also constantly improved year by year, and the cost of doing these upgrades is not cheap at all.The money that manufacturers have to spend on research and development of new materials and technologies is categorized as the final product.And inflation also affected quite a lot of smartphone prices besides technology factors.

But the investment costs for R&D and inflation don't tell the whole story about the escalation in smartphone prices.By raising the selling price slowly 'according to the route', Apple, Samsung and other major manufacturers in the industry are creating a new segment, defined as extremely high-end, that can help them collect. About being more profitable and more reputable.

Yes, it is a price increase according to the route

Regardless of a few exceptions, the price of phone models from top brands is steadily increasing year by year.

"Although overall in all segments, the number of smartphones sold has decreased slightly in 2018, but the average selling price (ASP) will reach 345 USD, which means an increase of 10.3%. at $ 313 of 2017, "IDC analyst Anthony Scarsella revealed in a summary report on the smartphone market.In addition, while the selling prices of products in the low or mid-end segments tend to stay the same or decrease slightly, there is a significant increase in the premium segment, leading to the overall price increase of the whole branch.And compared to figures from many years ago, you will surely be startled by this increase.

For example, the selling price of Apple products has increased steadily for both their iPhone and iPhone Plus / Max models, making the iPhone XS Max a luxury item.

Selling prices of Samsung S, S Plus and Note models are also increasing steadily.Even before the explosion of the $ 1,000 name of the Galaxy Note 9 took place, the S9 Plus - the direct competitor of the iPhone 8 Plus and iPhone X last year, also inched toward the $ 1,000 figure.

Below is a table comparing the prices of some of the leading smart phone manufacturers' models in the period from 2016 to 2018 in two typical markets, the US and UK, you can refer to.

US market :

2016 (starting price)

2017 (starting price)

2018 (starting price)

% change in the highest selling price from 2016 to the present time

iPhone (cheapest line)

iPhone 7: 649 USD

iPhone 8: 699 USD

iPhone XR: 749 USD

15.4%

iPhone X

Not yet released

iPhone X: 999 USD

iPhone XS: 999 USD

0%

iPhone Plus / Max

iPhone 7 Plus: 769 USD

iPhone 8 Plus: 799 USD

iPhone XS Max: USD 1,099

42.9%

Samsung Galaxy

Galaxy S7: 650 - 695 USD

Galaxy S8: 720 - 750 USD

Galaxy S9: 720 - 800 USD

15.1%

Samsung Galaxy Plus

S7 Edge: 750 - 795 USD

Galaxy S8 Plus: 785 - 850 USD

Galaxy S9 Plus: 840 - 930 USD

17%

Samsung Galaxy Note

Note 7: 834 - 880 USD

Note 8: 930 - 960 USD

Note 9: 1,000 USD

13.6%

OnePlus

OnePlus 3: 399 USD

OnePlus 5: 479 / OnePlus 5T: 499 USD

OnePlus 6: 529 / OnePlus 6T: 549 USD

37.6%

LG G series

LG G5: 576 - 689 USD

LG G6: 600 - 720 USD

LG G7: 750 - 790 USD

14.7%

LG V series

LG V20: 672 - 829 USD

LG V30: 800 - 912 USD

LG V40: 900 - 980 USD

18.2%

Google Pixel

Pixel: 649 USD

Pixel 2: 649 USD

Pixel 3: 799 USD

23.10%

Google Pixel Plus

Pixel XL: 769 USD

Pixel 2 XL: 849 USD

Pixel 3 XL: 899 USD

16.9%

UK market:

2016 (starting price)

2017 (starting price)

2018 (starting price)

% change in the highest selling price from 2016 to the present time

iPhone (cheapest line)

iPhone 7: 599 Table

iPhone 8: 699 Table

iPhone XR: 749 Table

25%

iPhone X

Not yet released

iPhone X: 999 Tables

iPhone XS: 999 Table

0%

iPhone Plus / Max

iPhone 7 Plus: 719 Table

iPhone 8 Plus: £ 799

iPhone XS Max: £ 1,099

52.9%

Samsung Galaxy

Galaxy S7: £ 569

Galaxy S8: £ 689

Galaxy S9: 739 Table

29.9%

Samsung Galaxy Plus

S7 Edge: 639 Table

Galaxy S8 Plus: 779 Tables

Galaxy S9 Plus: 869 Tables

36%

Samsung Galaxy Note

Note 7: 700 pounds

Note 8: 869 Table

Note 9: 899 Table

28%

OnePlus

OnePlus 3: 329 Table

OnePlus 5: 449 Table

OnePlus 6: 469 / OnePlus 6T: 499 Tables

51.7%

LG G series

LG G5: 539 Table

LG G6: 649 Table

LG G7: 599 Table

11.1%

LG V series

Do not open sale

LG V30: £ 800

Not yet open for sale

%

Google Pixel

Pixel: £ 599

Pixel 2: £ 629

Pixel 3: 739 Table

23.4%

Google Pixel Plus

Pixel XL: 719 Table

Pixel 2 XL: 799 Tables

Pixel 3 XL: 869 Table

20.9%

From the above two tables, we see the escalation in the most shocking selling price coming from OnePlus.The products of this manufacturer have skyrocketed after every new generation launched.OnePlus product launches are currently two variants each year: The OnePlus 6 was launched in June for $ 529 and the OnePlus 6T launched in October for $ 549.In this year's edition, the OnePlus 6T is 37.6% higher than the 2016 model in the US.If you buy this model in the UK, the increase is even more terrible, up to 51.7%.

"When the dependence on smartphones has increased dramatically in just a short period of time, industry-wide quality and component requirements will also need to be increased to meet product performance needs. Therefore, the price of the product must also be adjusted, and we think this is reasonable, "said OnePlus representative.

According to LG, "the main factors affecting the increase in selling prices include components costs, competitors' prices, carrier incentives, tariffs, etc. The fact is, the initial costs This is increasing day by day so we are forced to raise prices to make a profit, 'Gen Hong, LG's global communications director, shared in an email, and added about the introduction of many side variations. Next to the main models like the LG V35 will have a positive effect on lowering the price of the previous model, in this case the LG V30.

Interestingly, Pixel 2 and Pixel 2 XL are priced similar to Pixel and Pixel XL.However, with Pixel 3, Google increased the price of this product to 23%, without having to add additional hardware like the second camera on the back and make minimal design changes.Did Google push prices up to "rival" their opponents?

But the cost of producing phones is now more expensive?

The phone, like all other electronic devices, is a combination of parts that originate from different suppliers and if the cost of those parts increases, it is definitely the selling price of The final product will also have to increase accordingly.

1. Discover the interior of the iPhone Xs

The need for more storage in the past few years has led manufacturers to equip their products with more ROMs, pushing up the investment costs for memory and causing suppliers to invest more in construction. more factories, more chains to meet demand.

Equipped with more sophisticated hardware packages such as the front camera 3D depth sensor of iPhone XS or more lenses, like the three rear cameras of Huawei Mate 20 Pro, or the use of materials such as glass or ceramic and high-end machining technologies will also make the device more expensive.

For companies like Samsung, LG . the money to build a completely new production process for elements like curved glass and flexible OLED screen is also extremely expensive, they are forced to raise prices to make up for This initial investment fee.

After all, upgrading the product and increasing the price is perfectly reasonable, we have to recognize it.But the point here is whether the increase given by manufacturers is reasonable?Or are they just trying to 'plug in' the hardware upgrade to legitimize the dizzying escalation in product prices.For example, the case of the OnePlus 6T as mentioned above.I don't think the cost of upgrading hardware, software features, inflation or other related factors can make the price of this product nearly doubled in just two years!

1. The highest performance Android 10 smartphone chart as of September 2018

What should the ceiling price be?

So, what should the ceiling prices for these products be?

The $ 1,000 phone from Apple and Samsung is clearly just the start of a stronger increase in the price of future smartphone sales, and analysts think that with the actual demand for smart phones like Currently, buyers will eventually have to give in and see it as a matter of course.

Apple continues to break every rule when it comes to selling prices of consumer electronics products, their products increasing year by year.This price increase comes at a time when their competitors like Samsung are under great pressure, and it also makes consumers think that the products of the Apple house are on a real level different from the rest.

With the current price of iPhone XS, Galaxy Note 9, other manufacturers have reason to follow.Even mid-range models (iPhone XR and OnePlus 6T) can completely create a cover for their price increases.For example, the OnePlus 6T with $ 549 still costs nearly half the amount you spend on iPhone XS, a relative value that many people find "easy to swallow" for a "cheaper" phone. with high-end hardware parts.

"When Apple announced the iPhone X for a thousand dollars . almost the entire smartphone industry supported them. Because this created all the other manufacturers a bit of 'breathing' space. I can imagine that there are smiles of approval from Samsung and Huawei and other names, simply that at the moment, only Apple is the one who dares to pioneer selling prices, 'said one. market analyst said.

In other words, while Apple can pocket the most profit, the bold increase of iPhone X also helps competitors earn more money on each product.

Don't worry, mid-range phones are more and more affordable

The high selling price in the flagship segment does not mean that the overall price of each phone sold in the market will increase.

In the past 2018, we continue to see fierce competition in the mid and low segments, where models like the Motorola Moto G6 and E5 series become great handsets with comparable prices. each year is 250 USD, 219 £ or 399 USD (in case of Moto G6).

Huawei's Honor brand is also a notable name for devices in the mid-range, low-range, very good balance between value and cost when using popular designs and features, such as bezels. Slim and dual camera, portrait mode . these are features that everyone craves.Xiaomi, Nokia, Oppo, Asus and other brands also help fill the gap in price in the smartphone world by quietly creating basic, affordable phones for those who don't want to spend too much for a phone, while still having very good configuration.

Therefore, while the most powerful, best and most beautiful devices are still walking hand-in-hand on new steps in the selling price, there is still a 'miserable community' in the phone segment. Mid-range and low-end, targeting those with a tighter budget or more basic needs.

If a 1,000-dollar phone sounds outrageous, you may need to find beauty in a more modest phone, either try to overcome the shock in the selling price and accept the time of a phone. The top with $ 600 has just been 'nothingness'.

What do you think about this issue?Please leave us a comment in the comment section below.I hope you find a suitable smartphone for yourself.

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