There are many uncertain things in life, but a constant thing next, except change, are the rising prices of smartphones, especially the premiums. No more than two years ago, consumers would complain about how expensive 800 million phones are. Analysts scoffed at the iPhone X's $ 1000 price tag and predicted Apple's humiliating defeat. Today, $ 1000 has become the new commonplace for premium phones, and there is no sign industry is going to reverse the course. And, like that or not, it's partly thanks to our consumers as well.
You can also thank Apple. Many smartphone makers have probably long dreamed of raising prices to four digits, but only Apple actually dared to break through the barrier. Analysts and journalists called it out, but $ 1
But why do phone prices go up? The most immediate reason and the apology companies love to give are the rising prices of the components themselves. There is truth to what is set in what is often called the Material. More advanced component costs more to make and some materials provide lower returns and increase costs. As smartphones stick more and more things in small spaces, these numbers will also go up.
This reasoning also flies in the face of some facts and figures. OnePlus, which also warns of increasing component prices, is still able to sell its flagships on less than similar smartphones. Google barely changed anything from Pixel 2 to Pixel 3, but hiked up the price by more than $ 100. And if you just look at BoM, the gap between the cost of building and selling price is almost unreasonable.
At this point, the companies will incur the costs of research and development, marketing (why do buyers have to pay for things that get shoved to their faces?). certifications, rates, fees, etc. to explain the unwritten costs of these bills. It is also the factor "competitive pricing", which simply means trying to do what others do. These are also the same things you have paid for in smartphones many years ago, but the global economy is also pushing prices there.
However, at the end of the day, prices are so high also because buyers are willing to pay so much. Companies have learned, perhaps much to our disadvantage, that there will always be people who are willing to buy the most expensive phones they put out, be it features, brand recognition, or whatever. If the iPhone X and subsequent phones flopped because of their price, if the consumers flocked to cheaper but equally capable brands, it would probably have been the last thing we had heard of $ 1,000 phones. Unfortunately, that was not the case.
It is not a very sustainable situation and that the price bubble can burst soon. It's not like consumer spending capabilities have risen along with the prices. If anything, buyers will be more likely to keep their ultra expensive phones far longer, which in turn means companies will be able to sell less of them over time. On the other hand, this may also force the same companies to increase prices even higher to compensate for lower volumes.
This can very well force consumers to become more aware of other brands that offer just as much at lower cost. While OnePlus prices increase, it is still significantly lower than the top three smartphone makers. Those outside the US can also look at Xiaomi, Honor and other Chinese brands for alternatives. And then there are midrange phones that also deal with high-end phones in terms of performance and features. While smartphones have become almost essential to today's modern lifestyle, they have also become luxury products that indicate status and prestige. Soon, however, it will be a luxury that very few will be able to pay.