Smartphone pricing: The point of diminishing returns

[Puddled]

The vast majority of phone users just text, phone, surf and take an odd picture or selfie and perhaps listen to music

Now that we are in the age of + $1000 phones, is there a point of diminishing returns and where is it?
Where is the point where you are spending for form over function?

Example; For apple I would say the SE is that point. You get a fully functioning smartphone for $400 with most of Apple's bells and whistles. Yes it's a smaller screen but that's about it.

For android I'm not so sure, but my S6 still does it all for me.

What phones are out there which do it all for a minimum of fuss and $$$$$?

Where is the best value for money to be found with compromising the main functions and specs?

Last year's android flagship?

 

[ozaz]

I switched to getting a mid-range phone instead of a flagship phone early this year.

I got the Galaxy A5 2017 which I think was only about $350 when it was new. I've been happy with battery life (which I think is better than similarly sized flagship phones), speed, screen quality and stability. The only thing that would tempt me to splash out on a flagship again is if I wanted a top-quality camera in my phone. Which I might do in the future, but don't need at the moment. In any case, the camera on the A5 is by no means terrible.

I suspect my next phone will be another midrange phone. I'd rather put the extra cash towards buying the best quality laptop I can afford next time I upgrade that.

 

[Puddled]

I switched to getting a mid-range phone instead of a flagship phone early this year.

I got the Galaxy A5 2017 which I think was only about $350 when it was new. I've been happy with battery life (which I think is better than similarly sized flagship phones), speed, screen quality and stability. The only thing that would tempt me to splash out on a flagship again is if I wanted a top-quality camera in my phone. Which I might do in the future, but don't need at the moment. In any case, the camera on the A5 is by no means terrible.

I suspect my next phone will be another midrange phone. I'd rather put the extra cash towards buying the best quality laptop I can afford next time I upgrade that.

That's where I think i'm going when my S6 (eventually?) dies. I've no need for a flagship phone anymore. Certainly one that costs €1000's

My last IPhone (a 3GS) cost €500 new. Those days are long gone huh

 

[mi7chy]

I'd be content with something cross carrier compatible with Verizon like the ~$300 Moto G5S Plus 64GB storage 4GB DRAM or the Moto X4 for ~$400.

https://www.motorola.com/us/products/moto-g-plus-gen-5-special-edition

https://www.motorola.com/us/products/moto-x-gen-4

 

[I7guy]

Mobile phones these days literally runs peoples lives. I do not mind spending $$$$ on something that I use to make money and communicate with and that as part of my daily life have to spend time conducting business on that phone. If I were a student your point is a good one.

 

[v0lume4]

Great discussion.

You asked about phones that do it all at a decent price -- people seem to really like the OnePlus 5. That phone is a steal, IMO. You get a top-end processor (same one that's in the S8 and other flagships), and 6GB of RAM! You also get the most important things (IMO) -- darn near stock Android. OnePlus' skin/additions to Android are very minimal. And it's just $480.

Nearly all phones cover our basic needs at this point. Nobody needs the latest and greatest. The insane performance of the drool-worthy A11 chip in the new iPhones? 90% of people don't need it. Now, I'm not advocating that no one should buy flagships. If you want it, and can afford it without blowing a large amount of cash that you can't afford to lose, then sure, go for it. But it's not a necessity like it used to be. The smartphone is now commoditized.

-- edit --

If I purchase a flagship, I intend on keeping it two to three years. I kept my iPhone 5 for four years. I think that's a good way to buy something new/fun/exciting and also not break the bank. Besides, buying a flagship at launch guarantees good performance for at least a couple of years.

 

[Rum_Becker]

I switched to getting a mid-range phone instead of a flagship phone early this year.

I got the Galaxy A5 2017 which I think was only about $350 when it was new. I've been happy with battery life (which I think is better than similarly sized flagship phones), speed, screen quality and stability. The only thing that would tempt me to splash out on a flagship again is if I wanted a top-quality camera in my phone. Which I might do in the future, but don't need at the moment. In any case, the camera on the A5 is by no means terrible.

I suspect my next phone will be another midrange phone. I'd rather put the extra cash towards buying the best quality laptop I can afford next time I upgrade that.

This is my feeling exactly. I have the same phone and love it except for the camera, I picked mine up for 110$ (360$- 250$ prepaid Mastercard which they gave me) from my carrier brand new with no contract. I did not even have to pay the 110$ upfront, it is taken off in installments, there is no why I would pay 1500$ for an iPhone X or any other Flagship phone when all I need to spend is 110$. No need for insurance at this price point, if my phone breaks I have my iPhone SE 16GB as a back up which I only paid 10$ for.

 

[deany]

Great thread.
Something I have thought about.

I bet if you asked most folk how much their phone was they wouldn't know. They'd say "its an iPhone 6 I pay £40 a month but I get unlimited this and that".

When they phone for an upgrade the carrier probably hides the cost and says I can give you an iPhone 8 for £55.

So £15 more PM and this is justified by Starbucks Latté theory and inflation.

Moving forward I see it becoming like cars where folks with pay for say 50% of cost PM and then hand smartphone back after a set time, 12 months or 24 months, maybe even 36 months.

This will help bring PM cost down when smartphones get to £1500 to £2000 in say 4 to 5 years time.

In the meantime the youngsters and "value for money customers" will get great smartphones for £118 approx like Xiaomi Redmi Note 4 and pay cash saved or get as present for birthday or Xmas present. Then get on the PM ladder (the only way is up on this ladder!) as they get older.

 

[I7guy]

Great thread.
Something I have thought about.

I bet if you asked most folk how much their phone was they wouldn't know. They'd say "its an iPhone 6 I pay £40 a month but I get unlimited this and that".

When they phone for an upgrade the carrier probably hides the cost and says I can give you an iPhone 8 for £55.

So £15 more PM and this is justified by Starbucks Latté theory and inflation.

Moving forward I see it becoming like cars where folks with pay for say 50% of cost PM and then hand smartphone back after a set time, 12 months or 24 months, maybe even 36 months.

This will help bring PM cost down when smartphones get to £1500 to £2000 in say 4 to 5 years time.

In the meantime the youngsters and "value for money customers" will get great smartphones for £118 approx like Xiaomi Redmi Note 4 and pay cash saved or get as present for birthday or Xmas present. Then get on the PM ladder (the only way is up on this ladder!) as they get older.

I know exactly how much my phones have cost since 2013 as I buy them outright. But almost any electronics can be bought on a payment plan these days, it's just that the phone is not tied to the cellular service.
[doublepost=1505660658][/doublepost]

The vast majority of phone users just text, phone, surf and take an odd picture or selfie and perhaps listen to music

Now that we are in the age of + $1000 phones, is there a point of diminishing returns and where is it?
Where is the point where you are spending for form over function?

Example; For apple I would say the SE is that point. You get a fully functioning smartphone for $400 with most of Apple's bells and whistles. Yes it's a smaller screen but that's about it.

For android I'm not so sure, but my S6 still does it all for me.

What phones are out there which do it all for a minimum of fuss and $$$$$?

Where is the best value for money to be found with compromising the main functions and specs?

Last year's android flagship?

You can't really predict what people want and why or do with their phones. F150 is the best selling vehicle in the US. Go figure on that.

It might be true that a $300 android device in the aggregate does 70%-80% of a Samsung at 50% or more of the price.

With apple, one now has a range of options and like best selling F150, which seems counterintuitive nobody knows the demographic or sales of the iphone x...yet.

 

[deany]

I know exactly how much my phones have cost since 2013 as I buy them outright. But almost any electronics can be bought on a payment plan these days, it's just that the phone is not tied to the cellular service.
[doublepost=1505660658][/doublepost]
You can't really predict what people want and why or do with their phones. F150 is the best selling vehicle in the US. Go figure on that.

It might be true that a $300 android device in the aggregate does 70%-80% of a Samsung at 50% or more of the price.

With apple, one now has a range of options and like best selling F150, which seems counterintuitive nobody knows the demographic or sales of the iphone x...yet.

Sure, me to since 2007
MR forum member are not typical of the general pubic though.
cheers

 

[eyoungren]

$1000 is my limit. Before the new iPhones that would get me the max capacity that Apple offered. I will not pay that for the base model iPhone.

I'm still willing to pay that for an Android phone, presuming I still get the most offered.

So, that's my limit. After $1000 you're entering brand new computer territory and if I am going to do that, I have several 2003-2009 era Macs and PCs that offer a better reason for a new computer than a new phone.

I can justify $2000 for new phones (my wife and I) every 2 to 3.5 years if I am getting the maxmimum offered for a device. Again, I'm not paying that for the base/starter model.

 

[kasakka]

I find it hard to justify anything more expensive than my Oneplus 3. Sure, more expensive phones from Samsung etc have better cameras and displays but overall experience using the phone is not really changed. On my OP3 I have a big 5.5" screen, no performance issues, a reasonably good camera, it's physical size is still quite easy to use one handed, it charges really fast and with a custom ROM I get about 1.5 days of battery life with my use. Adding a skin on the back gave some nice grip too. I don't see anything in more expensive phones that would make them worth spending twice the money or more.

At the moment I'm waiting for a paradigm shift and hoping that those rumored foldable phone/tablet hybrids will be it.

 

[JaySoul]

I base things on price.

If I can get a flagship phone after a couple of months for under £500, I'm happy to pull the trigger.

E.g. I got a used S7 Edge for £300 (sold it for £250!). My new S8 I paid £450. My Samsung Gear S3 was £175.

That's why sure, it would be nice to have an iPhone X and an Apple Watch but I'm not stumping up £1500 for them! I tend to plough most of my extra money into investments instead.

 

[frankgrimes]

Superb thread in my mind the One Plus hits a lot of things but I will never buy a phone that doesn't have an sd card slot, no matter how powerful, great it is. SD Card Slot means I'll never run out of storage and I can store my most important things on the card it also makes switching from one phone to another easier.

Personally I think I'm done with Samsung, the performance of my Mate 9 - even if I like Stockandroid - is faster than the S8, S8+ and it just keeps running and running thanks to the 4.000 mah battery and yet it only costs 460 € at Amazon. Samsung is charging a premium but their totally consumer unfriendly focus combined with a premium price tag just isn't worth it anymore, when will they realize that it's the consumers choice if they want to remap the Bixby button or not a consumer shouldn't have to use third party apps or root methods in order to get the function he wants out of his/her phone, period.

Yes smartphones are part of our everyday lives and a very important part also but iat just find it hard to justy like 1.000 € for the Note 8 when it's basically a better S8Plus with a smaller battery and a nice stylus. Apple on the other hand is charging a premium price tag for a prototype phone...so I honestly don't know what both companies are thinking maybe it is because they have no competition who knows but 1.000 Bucks to me is the sphere were good Laptpops and 2 in 1s are starting and these are real productivity machines.

It's also funny that a small company like One Plus can deliver faster updates than the big guys like Samsung, LG, Huawei. I think my upper limit is somewhere in the 800 Bucks range which is an awul lot of money and I expect a lot from such an expensive phone, the only ones I would go higher are the above mentioned foldable/tablet hybrids because they'll provide a real incentive, a small phone and minitablet in my pocket all the time? Sign me up for that.

Long story short given the current market situation I think Smartphone prices are getting out of hand. The Iphone X 256 GB is € 1.349 Austria (great job killing the 128 GB variant Apple lol), the Note 8 is € 999 and given these prices and the faster price downfall even for Apple! it will be hard to resell them for sure.

Will be interesting to see for how much the Pixel XL 2 and Mate 10 (especially the pro model) are going for.

 

[samcraig]

I've had this conversation before. There's definitely a point of diminishing returns. But there's also social engineering where people have become accustomed to thinking they need the latest and greatest.

There are a lot of specs consumers get sucked into so they buy a device that far exceeds their needs.

In photography (and phones) megapixels count a lot less than things like sensor size and f-stop. Especially when the majority of use is social media vs printing a billboard (literally).

In computers - it's loads of ram, hard drive space, speed and the latest chips. When again - a good portion of people are surfing the web and watching videos.

In TVs - it's contrast ratios, and other things that become meaningless because they exceed anything anyone would ever notice.

I have always loved having a phone that is new and keeping it for a year or 2 and then getting a new one. Many times I've been able to do this because originally it was part of the plan (of old). I've had the Note 5 now for 2 years. And I've been tempted towards newer phones. But I really have to stop myself and ask - why? The phone I have now is fast enough. It takes GREAT pictures. Does everything I need it to do. Are there better cameras? Yes. Faster devices? Yes. Nicer screens? Sure. But the phone I have does everything I need it to do now.

I'll get a new phone when that story changes. And when I do - I will determine if it's worth jumping into a latest flagship or not. Right now - if I were to upgrade, I would be quite content with an S8. Even if that's a year from now.

 

[Ahiqar]

As someone else said, I like getting the flagship phones a couple of months after release. For example, I got a Galaxy S8 over the summer for $420 when Best Buy ran a $300-off promo.

 

[Rum_Becker]

Long story short given the current market situation I think Smartphone prices are getting out of hand. The Iphone X 256 GB is € 1.349 Austria (great job killing the 128 GB variant Apple lol), the Note 8 is € 999 and given these prices and the faster price downfall even for Apple! it will be hard to resell them for sure.

Will be interesting to see for how much the Pixel XL 2 and Mate 10 (especially the pro model) are going for.

I think the current market is double sided, along with these record breaking phones prices, we have a record amounts of phones that are low cost great quality and have the performance of last years flagship even the current years. I think more people are holding onto their devices, so companies have to charge their stupid ones to make up for this.

 

[maflynn]

The price will continue to increase as long as people are willing to buy them. I think Apple will have a very popular phone on its hands with the X, which may mean other makers will follow suit and continue to increase the price of their phones.

I'm very tempted to buy a S8 simply because it offers all of features of the X, but at 750. Even then that's still very expensive, especially for what I use a phone for. I'm on an SE and the price point of that phone is more aligned with my budget.

At some point the price will be too much and people will migrate to less expensive models, if Samsung and Apple cater just to the high end, they may see more customers fleeing for a competitor.

 

[I7guy]

The price will continue to increase as long as people are willing to buy them. I think Apple will have a very popular phone on its hands with the X, which may mean other makers will follow suit and continue to increase the price of their phones.

I'm very tempted to buy a S8 simply because it offers all of features of the X, but at 750. Even then that's still very expensive, especially for what I use a phone for. I'm on an SE and the price point of that phone is more aligned with my budget.

At some point the price will be too much and people will migrate to less expensive models, if Samsung and Apple cater just to the high end, they may see more customers fleeing for a competitor.

Neither company though caters to just the high end; at least in terms of phones.

Both companies offer enough models at various price points to I think suit most buyers.

I agree though, the upward spiraling price gives one pause (both Apple and Samsung)about what one is really buying.

 

[maflynn]

Neither company though caters to just the high end; at least in terms of phones.

No they don't, but at least with Apple they don't give a high level attention to the low end. They didn't roll out a new SE this year, but they roll out their other phones annually.

My point though is that with a fixation on increasing the price, other more nimble competitors may sneak in.

 

[Rum_Becker]

No they don't, but at least with Apple they don't give a high level attention to the low end. They didn't roll out a new SE this year, but they roll out their other phones annually.

My point though is that with a fixation on increasing the price, other more nimble competitors may sneak in.

They already have, many low cost, medium/high quality phones on the market from China. The new A11 is more powerful is than a MacBook pro in some benchmarks, since most people only use 10% of a computer potential I don't think most people need handheld super computers. Retina, touch Id, large display, dlsr quality cameras and water proofing were all great and reasons to upgrade. Now, besides the die hard fans on each side, I think upgrade time will become longer and longer.

 

[mpavilion]

I feel like I would not personally pay $1000 (in 2017 dollars) for a phone, no matter what features it offered.

That said -- like others here, I've bought phones full price for years (or leased with full price in mind). And I've seen the price creep up: from $529 (Nexus One in 2010) all the way to $750 (iPhone 7 Plus in 2017). So perhaps I will be eating my words in a few years, if this trend continues. But I don't think so. Aside from the actual monetary inflation factor, $750 feels like "this is where I get off this train"...

(And yet: if I were in the market for a new 8+, I'd have to pay $800. And I probably would! "It's just $50 more than I paid last time, for the best iPhone available; not counting the insanely overpriced one with the same processor and weird UI." So the upward trend continues...)

 

[Broadus]

It does seem that things have gotten out of hand with smartphones and, as Mike said, this will continue as long as people continue to pay the premium prices. The most frugal iPhone choices are the SE and the 6s/6s Plus (thinking about larger screens). The question for me is how long will a new 6s or 6s Plus purchased today continue to provide a decent user experience. Let's say that a person used his or her phone for calls, texts, email, web surfing, photos, and listening to music. Buying it new today, could such a person get four years out of the phone before it became so slow that it was almost too annoying to use?

 

[v0lume4]

It does seem that things have gotten out of hand with smartphones and, as Mike said, this will continue as long as people continue to pay the premium prices. The most frugal iPhone choices are the SE and the 6s/6s Plus (thinking about larger screens). The question for me is how long will a new 6s or 6s Plus purchased today continue to provide a decent user experience. Let's say that a person used his or her phone for calls, texts, email, web surfing, photos, and listening to music. Buying it new today, could such a person get four years out of the phone before it became so slow that it was almost too annoying to use?

Great question. I can tell you from experience that my iPhone 5 was standing on it's last legs after four years. I got it at launch. iOS 10 (read: four OS updates after purchase) was the nail in the coffin. Performance truly started to degrade with iOS 9 I'd say.

Now, keep in mind that was a 32 bit processor, while the other iPhones were 64-bit.

While the iPhone 6S is significantly faster than my iPhone 5, I wouldn't recommend someone to purchase a two generation old iPhone at this point.