Guess what? Smartphone prices are on the rise. Who do we have to thank for this unexpected phenomenon? Apple and the iPhone X.
The entire smartphone industry– from low end no-name brands pushing sub-$100 Android-based smartphones of dubious quality, to Samsung’s latest Galaxy-whatever line– has fallen under Apple’s umbrella. As the industry leader in premium priced smartphones, Apple has given needed breathing room to Android devices to stop dropping prices and the trend is toward higher prices.
Ben Lovejoy explains the basics:
Analysts say that a variety of factors are likely to see the price of flagship smartphones continue to rise, with the success of the iPhone X a key influence… the company has proven skeptics wrong
People are willing to pay for a quality product. Imagine that.
What the industry is experiencing now is a movement toward more expensive flagship smartphones. Samsung, Huawei, OnePlus, and others, including Google with Pixel 2, have pushed prices higher on their premium brands, and held prices steady on their mid-range brands.
What does that mean?
Instead of racing to the bottom with ever decreasing prices for products that have no or little gross margin, therefore no real profits, Android smartphone makers are beginning to take some solace and comfort and profits from being under Apple’s price umbrella.
Even though a $350 iPhone SE is about one third the price of the high end iPhone X, therefore, giving Apple a broad product range, Android smartphone makers now have room to charge more, and make more money on each premium smartphone they sell.
Thanks to Apple and the price umbrella, this is a trend with legs. Sure, you’ll still be able to find a cheap Android smartphone, perhaps sub-$100, or sub-$300, but it will not compete on features or camera quality with higher priced models, and definitely won’t fare will against any iPhone model in usability or resale value.
Part of the problem Android device makers have when competing against Apple is Android itself. Low priced Android models seldom have upgrades to new versions of Android and most do not even sell with the latest version. Compare that to iPhones which get the latest iOS version every few months. iPhones improve each year and that’s worth a higher price tag.
It may seem strange that Apple’s iPhone prices have helped to save the smartphone industry but that’s exactly what is happening.