The Endgame is Near for Phones

[Tig Bitties]

Good video on a interesting topic;

My opinion;

Smartphones are like appliances, really for the general Joe Blow average consumer, it's like a Refrigerator or Oven or Washing machine. And for sure have become like PC's, once you have a good PC there's zero reason for most people to buy a new one year after year, nowadays you can keep a PC easily for 5 years, but you can upgrade specific parts like VideoCards or hard drives. So yes, the whole smartphone fad is fading and people don't care.

Plus when flagships are selling for $1,000+ and phones like the Pixel 3a can be had for $399, for the general non tech geek, a $399 smartphone that has a great camera, guaranteed 3 years of updates direct from the manufacturer, smooth OS, a good enough display for most, and generally good battery life. The average regular guy will think, what does this $1,000 smartphone truly get me compared to spending just $399?

Most people just want to make phone calls, text people, send e-mails, surf the web, use GPS, see sports scores, etc... for the 90% of smartphone users, having the latest SD855 Snapdragon or A12 processor meaning nothing to them.

 

[dumastudetto]

Cheaper options have always been around. I agree for those who care mainly about phone photography then the Pixel 3a could be appealing. For those who value great design, experience, functionality, security and privacy, it won't appeal.

The challenge is to keep pushing the envelope forward in terms of unlocking new experiences and technologies that appeal to consumers. Apple is very good at this. In recent years we've seen things like this from Apple: incredible new designs, all-screen displays, best-in-class custom-built OLED, FaceID, Animoji, groundbreaking new camera technologies. Let's not ignore the custom silicon angle too where Apple is streets ahead of the competition.

I don't know what's happening on the Android side. If OEMs are just trying to compete on specs while using the same generic components, you can see why people might be fatigued. You need to go much further than that if you want to appeal to customers. You need to be able to drive the experience forward in new ways; the way Apple always does.

I do think the Pixel 3a is a clever move by Google. In a world where smartphone makers have all been emphasising the camera in handsets, offering a great camera (if not the best) at a low price has the potential to shake up the Android market.

 

[I7guy]

The mid-range android phone makers are fighting for the same customer at $399. I think it’s less $1,000 against $399, it’s $399 against $399.

 

[Tig Bitties]

One thing to keep in mind, is people like us on this forum, are the super geeks, we make up 5% maybe 10% max, of smartphone buyers. 90% of the general public that buy smartphones don't give a rats ass about full screen displays or better silicon, or great OLED technology. I know tons of hardcore iPhone users that bought the iPhone 8 Plus over the iPhone X or XS the past year. It was price that swayed them to stay with the older design, plus they felt more comfortable with it.

The iPhone is like the Big Mac from McDonald's everyone's had one, and it's not the best but the most popular.

Look at iPhone sales report recently, Apple admitted that 1st Qtr. 2019 compared to 1st Qtr, 2018, that phone sales are down close to 20%. That's a first, and very telling. As well as Samsung sales being down, and Google's Pixel not selling as well. People, meaning the general buying public, not us tech geeks, are not cool with the outrageous pricing of flagship phones these days. $1,000 + is insanity.

I think the smartphone market has plateaued, and people treat them like they do a home computer. Once you have a good high end PC, then there's zero reason to rush to buy a new anytime soon, people will keep it for years.

 

[Tig Bitties]

Sort of off topic, but a serious question. So the new Pixel 3a XL is $479, and the flagship Pixel 3 XL is pretty much double that price at $900 to $1,000.

Over the years we have seen the bill of sale, om iPhone's and Galaxy phones, etc...and I recall true costs of parts being like $250 to $300 or so? And I understand there's way more involved in the pricing than just the costs of parts, you have the engineering, and software, marketing, and labor, and profit markup, shipping, etc...

But my point or question, if a 3a XL is $479, and a flagship 3 XL is $900, really what's the major difference in parts that shoot the price of the phone up to 100% double the price? I know a better display, and top processor, and wireless charging, etc... all add up to more, but, if the true parts costs are in the $250 to $300 range for flagships, a good display vs a great display, or a low end CPU vs a flagship CPU isn't dramatically that much more expensive than mediocre parts, but the rest of the bill of material cost remains pretty similar, the software, the labor, the shipping, etc...why such a massive price difference ? Are we just getting hosed and people waking up to it finally?

 

[Heat_Fan89]

Once you have a good high end PC, then there's zero reason to rush to buy a new anytime soon, people will keep it for years.

I built a gaming rig over 6 yrs ago and I haven't upgraded it since and it can still play 90% of my games fully maxed out. No need for an upgrade yet and if I do it will probably get a memory bump from 8 to 16GB and a faster videocard.

I do agree that smartphones have become like appliances and you can find fully featured ultra-fast phones for even less than $399. I purchased a Huawei Mate SE for $199 and it's lightning fast, dual sim, Micro SD support, unlocked, FHD+ edge to edge display, nice camera, FM Radio and it includes a free soft silicon clear case. The phone even looks and feels premium. People will still buy Apple no matter the price because they see value in it. My definition of value is different from iPhone buyers but neither is wrong. If someone finds value in a $1000-1500 handset more power to them. I won't dissuade anyone paying that much.

 

[Infinite Vortex]

But my point or question, if a 3a XL is $479, and a flagship 3 XL is $900, really what's the major difference in parts that shoot the price of the phone up to 100% double the price?

The bleeding edge of technology, no matter what the device/object (such as TV, cars etc), comes with an additional price tag associated with it. Once a company has absorbed the cost of development (sales or patent fees) and manufacturing changes to a different efficiency level and/or scale of volume you start to see the big drops in price where companies can offer the "same thing" at a much lower prices.

In your example for instance, it didn't take Google any effort for the development of the camera software as they're taking it straight from the 3 and putting it into the 3a. The camera itself is either being made cheaper else simply comes cheaper as they're making significantly more of them. So yes, the 3a can be sold cheaper. Yes its true that they'll probably make a greater profit on the 3 at this point but in the Android space, this is what affords their ability to offer discounts.

 

[AustinIllini]

Sort of off topic, but a serious question. So the new Pixel 3a XL is $479, and the flagship Pixel 3 XL is pretty much double that price at $900 to $1,000.

Over the years we have seen the bill of sale, om iPhone's and Galaxy phones, etc...and I recall true costs of parts being like $250 to $300 or so? And I understand there's way more involved in the pricing than just the costs of parts, you have the engineering, and software, marketing, and labor, and profit markup, shipping, etc...

But my point or question, if a 3a XL is $479, and a flagship 3 XL is $900, really what's the major difference in parts that shoot the price of the phone up to 100% double the price? I know a better display, and top processor, and wireless charging, etc... all add up to more, but, if the true parts costs are in the $250 to $300 range for flagships, a good display vs a great display, or a low end CPU vs a flagship CPU isn't dramatically that much more expensive than mediocre parts, but the rest of the bill of material cost remains pretty similar, the software, the labor, the shipping, etc...why such a massive price difference ? Are we just getting hosed and people waking up to it finally?

This is a good question.

I don't really think about phones this way. Personally, I think we should measure phones not by price but by price per year of ownership. So, for me, if the pixel 3 lasts twice as long as the pixel 3a, then it's a good deal.

 

[Tig Bitties]

Going back to flagship phones going to $1,000+ lately. I thought a few years ago, all the big manufactures stated something along the lines, that OLED screens will be cheaper to mass produce, and high end processors should never really change in price as years go by, if anything they'll get cheaper due to manufacturing maturing, and with automation, labor should go down, RAM being mass produced in such large scale, pricing should be more affordable, and not go up.

Point being, shouldn't smartphones actually be getting cheaper, or at least stabilizing in price? Not inching up to $1,200 for a new flagship.

 

[AustinIllini]

Going back to flagship phones going to $1,000+ lately. I thought a few years ago, all the big manufactures stated something along the lines, that OLED screens will be cheaper to mass produce, and high end processors should never really change in price as years go by, if anything they'll get cheaper due to manufacturing maturing, and with automation, labor should go down, RAM being mass produced in such large scale, pricing should be more affordable, and not go up.

Point being, shouldn't smartphones actually be getting cheaper, or at least stabilizing in price? Not inching up to $1,200 for a new flagship.

All tech appears to be bucking the cheaper trend. Laptops are expensive as hell and so are phones. Even the "discount" iPhone XR is more expensive than the flagship iPhone 7 was. I can't explain it entirely because i'm not inside baseball. Is R&D spending on these devices going down? I can see FaceID as expensive to develop but this is kind of silly. Even if the components are getting more expensive, these devices still don't cost that much to build. I dunno, I'm rambling.

$1200 flagship is insane.

 

[Infinite Vortex]

$1200 flagship is insane.

Yes it is… but where does one think the money comes from to pay for things like that massive donut of a building they have as their new HQ or like Project Titan (Apple's autonomous car project)? The new News+ and Apple TV service… these all need infrastructure spending before they made cent 1. The development of ARKit can't have been cheap either. One can go on.

 

[trfc54]

It is a self perpetuating loop fed by social media and tech "news": if you don't have the latest and greatest you are missing out a lot (this is what they want you to believe). Many reviewers like to talk in generalities with terms like better or worse, with no specifics on how much better or worse.

To consumers who don't want to spend a lot of time researching products, the mere notion that something is better, or much better, is enough to maybe sway your mindset that you should buy the new, shiny product. A lot of reviewers are propagandists and shills as well, and it takes a discerning eye to be able to sift through the charlatans and those who are truly knowledgeable.

 

[AustinIllini]

Yes it is… but where does one think the money comes from to pay for things like that massive donut of a building they have as their new HQ or like Project Titan (Apple's autonomous car project)? The new News+ and Apple TV service… these all need infrastructure spending before they made cent 1. The development of ARKit can't have been cheap either. One can go on.

Profits from the $650 phone

 

[Breaking Good]

Point being, shouldn't smartphones actually be getting cheaper, or at least stabilizing in price? Not inching up to $1,200 for a new flagship.

My US$0.02, computer/smartphone O.E.M.'s have been holding prices constant for a number of years. With the economy doing as well as it is, RIGHT NOW, they are trying to grab all they can while they can.

I believe that the last release cycle was the last cycle that the hardware O.E.M.'s will be able to raise prices. As others have already alluded to, computer hardware is being viewed more and more like any other appliance with each passing day.

 

[sracer]

All tech appears to be bucking the cheaper trend. Laptops are expensive as hell and so are phones. Even the "discount" iPhone XR is more expensive than the flagship iPhone 7 was. I can't explain it entirely because i'm not inside baseball. Is R&D spending on these devices going down? I can see FaceID as expensive to develop but this is kind of silly. Even if the components are getting more expensive, these devices still don't cost that much to build. I dunno, I'm rambling.

$1200 flagship is insane.

It's relative. For some, a $1200 smartphone is a reasonable price. I guarantee whatever the upper price is that you think is reasonable, I'm going to find "insane".

Not all laptops are "expensive as hell". There are many laptops out there that are capable and quite affordable. What IS happening is that customers are more susceptible to marketing hype and spin than they have been in the past. Companies are able to convince customers to spend more than they need to for devices that suit their purposes.

YouTube reviewers work hand-in-hand with manufacturers to spin up the hype. Customers have been convinced that smaller bezels are an important feature worthy of spending extra on... things like ProMotion, Face ID, etc. as well. Placing a finger on a sensor is such a "hassle" that it is worth spending a few $100 more on a phone that doesn't need a finger sensor (not just that alone, but other "feechurs" bundled in as well).

 

[1BadManVan]

I think the one issue that keeps the flagship phones from falling quite as far as pc upgrade schedules is the control the consumer has over the device. You built your pc, you load it with what you want and upgrade when you want. Phone manufactures still have more control over the devices and as we have seen before, some try to sneak around and slow the phones down to get you to upgrade.

My worry is as the phone sales continue to decline, the manufactures will get more desperate to push us to upgrade. Including trying to slowly handicap older high end devices

 

[0388631]

The mid-range android phone makers are fighting for the same customer at $399. I think it’s less $1,000 against $399, it’s $399 against $399.

Precisely. I think people generally overestimate the amount of people who even pay for an iPhone in full at MSRP. The amount of buyers who do purchase at the MSRP rate in full make up a very, very small fraction of high end phone sales.

Granted, the high end phone pricing spectrum isn't tight itself. There's quite a bit of leeway. For the majority of people, a mid market phone is going to be enough. I also do wonder what the usage pattern is like for non-Apple enthusiasts who even go for the high end models. I think using the members of this forum as a basis is somewhat flawed as this is more or less an echo chamber of thoughts.

 

[aneftp]

iPhones still retain their value much better than android.

The key thing to leave is never pay full price for an android phone. Period.

And i use both iPhone (2007) and android (g1) since day 1.

If I’m gonna to pay $1000 msrp full price for phone. It will always be the iPhone over an android flagship.

I paid $1250 plus taxes for iPhone XS Max 256gb at launch.

But I would hesitate over paying $1000 for galaxy s10 Plus or google pixel 3xl. In fact. There were tons of galaxy s10 deals at launch. But I’d rather wait 4-5 months and get it close to 50% off new. Like I got google pixel 3xl 128gb for $500 (50% off) April 22 2019 deal.

 

[Tsepz]

I don't mind paying full price no matter what phone I get, I don't depend on selling my phones for the next one.

 

[retta283]

I generally like to hold on to my phones for a while, I just bought a used 6S to hold me over into the early 2020s. If it breaks before I'm ready to upgrade I might go back to my Motorola I've had for a decade and a half. I don't use the data on my phone often, mostly just calls and the occasional text.

 

[Healer Flame]

Sells are down because people are hanging on to their phones for much longer than before and the major reason is price of course.

 

[Tig Bitties]

With these outrageous flagship prices, U.S. carriers have slyly moved customers to 3 year plans, making thier monthly bill still the same.

So Joe Blow getting a brand new iPhone XS Max 256GB will still be paying his $30 a month, but now it's over 36 months. Where before it was $30 a month but over 24 months

Point being customers probably don't even realize this, but are happy to be unaware as they are keeping their phones 3 to 4 years anyway now .

 

[Vegastouch]

I built a gaming rig over 6 yrs ago and I haven't upgraded it since and it can still play 90% of my games fully maxed out. No need for an upgrade yet and if I do it will probably get a memory bump from 8 to 16GB and a faster videocard.

I do agree that smartphones have become like appliances and you can find fully featured ultra-fast phones for even less than $399. I purchased a Huawei Mate SE for $199 and it's lightning fast, dual sim, Micro SD support, unlocked, FHD+ edge to edge display, nice camera, FM Radio and it includes a free soft silicon clear case. The phone even looks and feels premium. People will still buy Apple no matter the price because they see value in it. My definition of value is different from iPhone buyers but neither is wrong. If someone finds value in a $1000-1500 handset more power to them. I won't dissuade anyone paying that much.

Agree. We got a Huawei Mate SE as well on Amazon for $218 and it's a really nice phone. Me I'm still using my GS9 and it is still working great but I am done with expensive price tags. My S9 was half price and why I have it but if I'm spending even $700 again I'm going to get a One plus which gives you bang for the buck.

Just watched a video by Flossy reviewing a One plus 7 Pro and for double the storage from the One plus to the Pro from 128 to 256 and double the ram from 6 to 12 GB it was only $50 more (from $700 to $750). And you get wireless earbubs but not as nice as Samsungs and a car charger.

I was liking what I saw from Samsung with the S10 but if I were going to get one of those I'd probably have got the S10e. However my S9 is still fine so didn't get one.
But getting a mate SE has opened my eyes more to looking to cheaper phones as that one is a great phone.
I still don't use wireless charging so I don't miss things like that to keep the price down. Don't have a wireless charger for my S9.

 

[grkm3]

We have 3 more years until we hit a wall.
2020 first gen 5g matured 7nm
2021 matured 5g 5nm ddr5 usf 3.1
2022 4k displays

Then who cares lol by 2023 cell phones will hit 7k single core and 30k multi and will replace pcs and laptops for most people

 

[Heat_Fan89]

But getting a mate SE has opened my eyes more to looking to cheaper phones as that one is a great phone.
I still don't use wireless charging so I don't miss things like that to keep the price down. Don't have a wireless charger for my S9.

My eyes were opened a long time ago. I refuse to spend more than $250 for a smartphone, too many good options out there. Back in 2015 I purchased a Motorola Nexus 6 on Amazon for $199 and then I bought last year the Huawei Mate SE. People think i'm exaggerating when I tell them it has the look and feel of an expensive iPhone. If I had just waited a month later I could have purchased that same brand new Huawei Mate SE for $179 on Amazon.

But like I said, each will find value in what they buy. It applies to someone like me who refuses to spend a lot of money on a phone and I have the disposable income to do it, as it applies to someone who sees value in a $1500 iPhone.