Why Android and iPhone Prices Are Likely to Keep Increasing

Smartphones are likely to get pricier with every passing year. (Image via  pixabay  /  CC0 1.0)
Smartphones are likely to get pricier with every passing year. (Image via pixabay / CC0 1.0)

When the iPhone X was priced at well above US$1,000, experts believed that the sales figures would pale in comparison to its more affordable predecessors. Blowing through their expectations, the iPhone X quickly outperformed the sales figures of previous models week after week. And with the Samsung Galaxy Note 9 launched at a price tag of US$1,250, we need to accept that smartphone prices are not going to drop anytime soon. In fact, Android phones and iPhones are likely to get pricier with every passing year.

The trend of rising prices

Anthony Scarsella, Research Manager at  IDC’s Worldwide Quarterly Mobile Phone Tracker, believes that the Average Selling Price (ASP) of a smartphone will jump to US$345 in 2018, up from US$313 just last year, signifying a price increase of more than 10 percent.

“Moving forward, we can expect this trend to continue as the ASP for a smartphone will continue to grow throughout the forecast period. In 2022, the final year of our forecast period, the average selling price for a smartphone will be US$362, resulting in a 5-year CAGR of 2.9 percent,” he is quoted by an IDC article.

The price increase will be steeper in the higher end models since the consumers in this segment will be more than willing to spend big bucks to get the best technology in their hands. In the mid-tier and lower end smartphone segment, prices are expected to increase over the coming years at a much slower rate since customers will mostly be looking forward to value-for-money deals even if they have to sacrifice some cutting-edge technology and performance.

Android phones have shown the biggest price jump over the years. (Image via pixabay / CC0 1.0)

Android phones have shown the biggest price jump over the years. (Image via pixabay / CC0 1.0)

Android phones have shown the biggest price jump over the years, with OnePlus models getting pricier by more than 32 percent in 2018 when compared to 2016 prices. Samsung, LG, and Google phones also saw price increases during this period.

Surprisingly, the iPhone and iPhone Plus prices only grew by about 7.7 percent and 4 percent respectively. So, what is driving the increase in Android and iPhone prices? Many believe that it is the inclusion of higher-end technology and better specs that are driving the smartphone prices across segments.

Resale value

When it comes to resale value, the iPhone seems to comfortably outperform Android phones.  In a study cited by Fortune, the iPhone lost just 34 percent of its value after a month of being used. In contrast, its competitor Samsung Galaxy S7 lost more than 50 percent of its value during the same period.

“After one year on the market, Apple models lost an average of 57 percent of their value compared to a loss of 72 percent for Samsung and HTC phones. LG brought up the rear with a 75 percent loss of value after one year”, the Fortune article says.

The iPhone has excellent resale value thanks to high demand from customers. (Image: Rob DiCaterino via wikimedia CC BY 2.0 )

The iPhone has excellent resale value thanks to high demand from customers. (Image: Rob DiCaterino via wikimedia CC BY 2.0 )

In another study, the iPhone X was observed to have maintained its value far better than all the rival brands. Bulk purchases of used iPhone X were priced at 75 percent of the phone’s original value. And the reason for the iPhone’s excellent resale value was attributed to the high demand from customers.

Since the iPhone was priced so high and desired so much by people, buyers opted to wait and secure the device second-hand rather than spend too much money buying it brand new. And given that smartphone prices are projected to keep increasing over the next few years, the iPhone will likely continue providing the best resale value to its customers.

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