Since 2010, the average price of a new mobile phone declined as a surge in new competitors to the market dragged prices down to record levels for technology. As aptly named low cost “giant-killers” were quick to reel-in the mobile powerhouse Apple by providing great quality technology at a fraction of the cost, making giant savings through minimal marketing and relying on great product satisfaction. This constant decline in pricing that the public have been lucky enough to see, when purchasing a handset outright, has begun to fade away as providers of the essential component parts within these phones increase their costs.
This has seen the majority of Apple and android pricing rise to maintain providing cutting edge technology and healthy profit margins. One company who has been able to avoid this, although a glance at their pricing may tell you otherwise, is Samsung. They have had internal production of these component parts for many years which has seen them be able to control their costs better than their competitors.
A range of mobiles released in 2014
The most recent flagship additions to the smartphone market will set the average consumer back almost £1,400 (iPhone XS), a huge increase compared to the price of Apple’s flagship in 2014, when the iPhone 6 Plus cost only £789. Are Apple really trying to say the price of creating a new mobile has almost doubled in price? This is hard to believe, especially when Apple’s technology is usually a year or two behind advances in Android handsets. These Android handsets are also heading in the same direction as the OnePlus One, the original “flagship killer” was available for £320. Their latest contribution to the market One Plus 6 (soon to be joined by 6T) now retails for £530. Another hefty percentage increase of 65%.
This price increase has obviously been pushed further down the sales chain where retailers are now adjusting their prices even further, beyond their initial profit lines, to compensate for increased purchasing costs. The addition in price these vendors make to handsets is not deemed as too bad, they have to make a profit otherwise there is no point in selling it. However the limit on the profit earned from catastrophically high rates of interest on their contract deals, including blurring the line between paying for the handset and the service they provide has begun to put customers in tricky financial situations.
Within all this price increase at the top end of the market, there remains competition between outlets to provide the best offer and make repeat customers out of those who will stop at nothing to have the latest phones. Don’t ever be foolish enough to take the first offer you see, compare phone prices before diving into contracts that could now set you back £1300 a year.
Never dismiss the lower end of the market where new entrants to the market make their mark and soon become household names such as Oneplus. It is possible to get a new phone with the latest technology and specifications as these high end phones for roughly £400, and just like a good band everyone likes to be a part of the group that can say “I found them first”