I remember when Apple launched its first Apple Smartphone in 2007 at a whooping cost of $500 for an outright purchase. For the most part in the last decade you were able to get a subsidized iPhone for $200 or less, depending on memory, size and season. Carriers heavily subsidized the cost of Smartphones in order to get consumers on their network and increase the depth of the cell-phone industry. What percentage of your cell-phone usage is for making calls?
When North America hit its peak penetration rate in this industry, the industry itself started growing in depth rather than size. Our phones became our cameras, our E-readers, our maps, portable computers, entertainment, etc…
So the question still remains. Are SmartPhone prices getting out of control?
The iPhone 8, which is expected to launch in the next month or so is widely forecasted to launch at a $1000-$1200 price point. This is the price of an Apple – MacBook Air 11.6in Intel Core i5 4GB 1.4GHz 256GB – Multi. Isn’t that insane? The price of an iPhone is more than the price of a MacBook?
Two years ago, Verizon announced a decision to finally end phone subsidies for older customers, and T-Mobile also announced a similar change to the way it operates two years prior. Now, these cell companies are asking customers to pay for the full price of the phone in installment plans. Fortune magazine called it the “death of the $199 iPhone.”
Perhaps even more shocking is that Apple isn’t alone in increasing costs. Samsung is also cranking up the price on its newer phones, starting with the Galaxy Note 8 that launched last month at a price of $930 for an unlocked 64GB version.
LG increased their average price of their premium models from around $600 to almost $850.