The Samsung Galaxy Note 8 has a starting price of $929 and, as such, it’s purely symbolic that it remains in the three-digit range, which raises the question: How expensive should a smartphone be in the first place? Aren’t manufacturers slowly taking this upward trend too far?
When looking at the upper price ceiling of its own product range, Samsung has really gone above and beyond with the new Galaxy Note 8. Just a few years ago, the limit at Samsung was about $200 lower. But don’t get me wrong: Samsung is not alone here; many manufacturers keep pushing the price tag up to a hefty sum when it comes to flagship models. This can be observed in Apple and Huawei, both of whom are creeping closer to that $1000 threshold with their luxury handsets.
But is that really justified? Personally, increased raw materials and labor costs do not fully justify such prices. Rather, I see it as following the requirement of “if it doesn’t cost anything, it’s not worth anything”, which is overly claimed here.
Also, you can’t forget that smartphones have a more than limited lifespan. Customers who purchase an expensive premium model want to remain in the flagship category in the future and replace their smartphones every two years at the latest. You used to be pretty well off phone-wise with $600 some time ago – which is still some serious moolah today – but now most flagships begin at a significantly higher price.
The interesting thing about it is the following: With Apple as the main exception, smartphones are anything but a good monetary investment, since prices are significantly lower after two or three months. But that doesn’t ruin manufacturers either; they still earn good money, which raises the question of why does the initial selling price need to start so high? It scares off potential first-time buyers instead of enticing them to make a purchase. I don’t see the point of this, primarily in light of creeping saturation on the market.
What kind of value does that convey?
With this in mind, I’m not just thinking about the purchase of a new smartphone. A lot of people deem it normal to buy a new smartphone every year and pass on their “old one” to siblings, children, friends or relatives. Teenagers then walk around with a smartphone in their pocket that a year ago cost as much as a scooter, a television or a sofa, all of which are replaced much less frequently and enjoy special importance. What I am conveying is this: Here, take this, it’s old and you can throw it away now. That doesn’t necessarily increase the appreciation for such an expensive device.
Of course, it’s not easy to specify a definitive pain threshold. But I certainly won’t be bringing home a smartphone that goes past the thousand-dollar mark. The $300-$400 price range now has perfectly good smartphones, saving a large majority of customers from having to shell out more for a decent phone. In my opinion, manufacturers should think about whether this price spiral is slowly going too far.
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