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Why are smartphone prices increasingly expensive?
May
There are many factors such as social, economic, and technological factors that have caused smartphone prices to skyrocket in recent years.
Smartphone prices are currently very high, some models can cost up to 2,000 USD. This price even surpasses the price of many mid-range laptop models or 4K TVs. Five years ago the story was very different. The price is almost around 600-700 USD. What has caused smartphone prices to increase so quickly?
First, let’s look back at the price of early smartphones, which was the first iPhone. The iPhone model’s selling price of $599 is called crazy by many. In fact, many people have chosen to buy an iPhone. Today’s iPhones cost up to $1,600 at the highest capacity level, but the iPhone’s price increase is quite slow. iPhone prices only really increased rapidly after they followed the model of releasing two models a year from the iPhone 6. The higher priced phones all had better features.
Google has a slightly different route. The Nexus One sells for $529, but the Nexus S to Nexus 4 lines get cheaper and cheaper, with a final price of just around $350. With the Nexus 6, the company started to increase the price again, and now with the Pixel 4 XL series, the price is up to 999 USD.
Samsung is also not out of the price increase trend. The Galaxy S20 Ultra they launched earlier this year has the highest price of 1,599 USD, while the price of the Galaxy Fold is 1,980 USD.
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Why do smartphone companies have to increase prices? According to Avi Greengart, President of analysis company Techsponential, part of the reason comes from user requests.
“The smartphone market is saturated and consumers are sticking with their phones longer, so manufacturers are trying to squeeze maximum profit from each smartphone. Although it is also opportunistic , it also reflects consumer demand: smartphones are an important long-term investment, used more frequently with more effects,” Mr. Greengart said. However, it can be said that today’s high-end phones are still worth it because of what they bring.
“Screens are getting bigger, tempered glass is better, frames are tighter and bezels are smaller. Batteries are also bigger, storage capacity has increased dramatically, and today’s processing components are even comparable to laptops in terms of performance. Increased memory, more powerful graphics and AI processing chips. Today’s phones also have more antennas, more cameras and dozens of biometric and security components Now there are technologies such as folding screens, ultra-wideband modems, complex optical zoom, LiDAR or 5G,” Mr. Greengart analyzed the factors causing phone prices to increase.
Technology develops, production costs are higher. Obviously, companies do not accept the loss themselves, but will include these fees in the smartphone price. It’s hard to imagine smartphone prices will ever decrease. It is likely that the top smartphone models will continue to push their prices up, while their technology is increasingly upgraded significantly.
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