Smartphones have sure gotten expensive. Prices skyrocketed over the last few years and now top-tier handsets cost an arm and a leg. Or at the very least, a kidney.
Take the Galaxy S20 family. You’ll part with a minimum of $1,349 if you want the cheapest Galaxy S20 model, or as much as $2,249 if you’re after a specced out Galaxy S20 Ultra. At least last year we had the entry-level Galaxy S10e to soften the blow.
Samsung and Apple now reserve their best features for their top-end devices, but as costs get higher, the question of value becomes more pertinent. A $2,000 phone simply doesn’t do twice as much as $1,000 phone, no matter which way you slice it. It’s not a rational purchase.
While manufacturers insist their high-end smartphones are worth the trip to the ‘ice bath operating theatre’, it seems many Australians are opting to keep their organs and choosing more affordable models.
According to Kantar figures for the fourth quarter of last year, sales of older iPhones were nearly equal to that of the entire 2019 iPhone range. Even among people choosing from the latest range, half of these people chose the cheaper iPhone 11 rather than a ‘Pro’ model.
Similar was true for Samsung; the company's cheap A series devices made up half of its sales for the last quarter of 2019, despite the Galaxy Note 10 launching in the same period.
Telstye’s latest Australian smartphone market study revealed a similar picture. The iPhone 11 and iPhone 8 were the two most popular iPhone models in the second half of 2019, and Android sales were driven by devices priced between $300 and $1,000.
The same report found that two-thirds of Australians over 16 that plan to purchase a phone this year want a 5G handset, but 71% are not willing to spend more than $1,000. 5G Galaxy S20 models start at $1,499.
Manufacturers have been struggling to find compelling new features to capture our attention for the past few years. They either add an extra camera lens or make the screen an inch larger. These are hardly groundbreaking upgrades, and the result is more and more of us either holding on to our phones for longer, or choosing models from previous years. Second-hand sales and refurbished models have increased in popularity too.
Sure, the Galaxy S20 Ultra’s “100x Space Zoom” sounds cool on paper, but it’s not the kind of feature that’s going to make it any easier to stomach dropping two grand on a phone. There’s clearly a limit to what most of us are willing to pay for a phone, and we’ve hit it. Most of us would prefer “good enough” to a scalpel to the small of the back.
After all, a phone is still a phone. When you can get a great phone for around $1,000, it’s hard to fathom how spending twice as much represents good value when you’re getting 90% of the functionality for much less.
High-end phones won’t go away but the higher the price, the more niche they’ll become. When handsets were cheaper, it was easy enough to justify springing for the latest iPhone or Galaxy. That’s clearly not the case anymore, and the “best” devices are now ostensibly status symbols for those fortunate enough to be able to afford them.
Luxury smartphones still sell - Apple had its most profitable quarter ever in the final three months of 2019 - but the average consumer is rejecting them. The margins are just high enough that they can offset lower sales.
Maybe manufacturers will continue this pricing trajectory and keep increasing costs with every new gimmick added to a phone. It seems likely. But it’s nice to imagine a world where Samsung and Apple aren’t just trying to make the best phone, but the best phone for the best price. A world where black market body parts don’t even factor into the equation when you’re buying a new phone.
Alex Choros
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