Why the cost of smartphones is increasing. 1000 $ is not the limit (Topic)

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Why the cost of smartphones is increasing. 1000 $ is not the limit


When in 2017 Apple presented the current price tag for the Iphone X in the amount of $ 1000 - it looked like not the best joke. Internet users accused Tim Cook of greed, his desire to cash in on the company's fans, and even called for a boycott of Apple products. But the reality is that the raised price tag not only did not scare away buyers, but, on the contrary, became the best (from a financial point of view) Apple solution and allowed the company to achieve record profits.

In 2018, the price tag of $ 1000 for smartphones no longer seems to be something impressive, this is the usual price for a top-end mobile device and in the future, according to analysts of the Cnet website, the cost of gadgets will only increase. For example, it is expected that the cost of a hypothetical Iphone X Plus will be higher than that of the previous model, which is currently not going to make a price list.

And if at the beginning of the article we remembered talking about "Tim Cook's greed", then it is worth noting that the price of other flagship phones of well-known brands continues to grow, and for example we will give a few numbers. The latest models in the Samsung Galaxy series are 15.1% more expensive than the 2016 models. But most of all, the OnePlus brand added in price, whose smartphones have risen in price by 32.6% over the same period.

Price increase for smartphones in 2018

Okay, the cost of mobile phones is really steadily increasing, but are there any prerequisites for this, other than the quite understandable capitalist desire to increase profits? According to Ben Wood, analyst at CCS Insight, the fact is that for a modern person, a smartphone has become an integral part of life and gadget users will agree to pay for a top smartphone of a well-known brand as much as the manufacturer wants.

IDC analyst Anthony Scarsella, who noted a decrease in the number of smartphones sold in 2018, agrees with this opinion. However, the end profit of manufacturers will be higher compared to 2017, thanks to the increased price tag.

Iphone X has set a new price bar and it has passed the consumer wallet test, so no one will stop Tim Cook from raising the bar to $ 1200. Of course, information noise will rise on the Internet, petitions may even begin to reduce the price of smartphones, but most fans of Apple products are unlikely to be stopped from buying by the increased price tag.

Also, the cost of phones is influenced by the costs of research, the development of new technologies, such as a triple camera module in Huawei P20, the construction of production plants, the use of expensive materials for the body and display of a smartphone, as well as an increase in the price of memory. In such conditions, the rise in price of gadgets seems quite logical. However, many experts say that the real cost of a smartphone is much lower than what buyers ask for.

The Topic of Article: Why the cost of smartphones is increasing. 1000 $ is not the limit.
Author: Jake Pinkman