The majority of flagship Android phones sold in 2-3 years will be under $400?

[Savor]

Asians usually start trends esp in technology. Japan was very influential back then with video game consoles, arcades, Tomagotchi, small digital cameras, and camera phones. They started the selfie craze long before that term was invented. I remember during 80's and 90's movies how Japanese were parodied as people who took photos everywhere. Watch The Flight Of The Navigator back in 1986.

Circa 2000-2002, and most Americans didn't own a camera phone yet. Most didn't even TEXT or knew what 3G was. Eventually, the Chinese (and Taiwanese) will leave their footprint into technology. If OnePlus One can sell 1M (5x more than the Nexus One at $529) and the company is barely over a year old, imagine what other companies can do? Lenovo, Huawei, and Oppo all have other sources of income. Same with Taiwanese Asus and Acer. They don't just make phones.

It is really up to the other more popular brands in the West like Sony, HTC, Motorola, and LG if they want to follow suit. Technology has matured so much in software and hardware. You can pick up a Sony Xperia M2 Aqua for under $300 with specs of the Samsung Galaxy S3 of 2012. You can pick up a OnePlus One for the same price. Or Xiaomi Mi 3 which is superior to Nexus 5 in alot of areas for even less. Or the Meizu MX4 for $300-$350 which can hit 50K in Antutu. Or Asus Zenfone 2 for $199 with performance comparable to the flagships of last year sporting Snapdragon 801. As phones got bigger, the prices for them unlocked have gotten smaller.

 

[jrswizzle]

Apple market share has nothing to do with it since the title isn't

The majority of flagship phones sold in 2-3 years will be under $400?

The title is:

The majority of flagship Android phones sold in 2-3 years will be under $400?




p.s. No-subsidy might be even more attractive than subsidies to customers who want to pay $0 down instead $199 upfront.


$0 down and installment plans

vs

$199 up front


The carriers have done their calculations. They get about the same money either way.

The saving comes from when you bring your own device.

You are correct, my mistake.

In that case, I think a majority of Android devices sold are already under $400. So what's the point of this?

 

[EbookReader]

You are correct, my mistake.

In that case, I think a majority of Android devices sold are already under $400. So what's the point of this?

majority of Android devices under $400 is very different from

majority of flagship Android devices under $400.

The point is the price for high end Android smartphones will drop in the coming years. Samsung will struggle selling their flagships at $700 when others sell devices with similar specs at half the price.

This is good news for consumers. Price competition has brought down prices for things like digital camera, HDTV and laptops. Smartphone is likely to be next.

If OnePlus can sell flagship Android at $299 and make a profit, so can brand names like Sony, HTC, LG and Samsung. Though, is Samsung willing to disrupt its own profit margin? They have the most to lose.

Lenovo has to create an "independent" subsidiary in order to follow Xiaomi strategy:

“We want to build a pure Internet-oriented model,” he said. “If we do this kind of model within the current Lenovo, there is a lot of conflict with existing channels and carrier partners. With a different team mechanism, we can do whatever we want.”

 

[MRU]

The majority of flagship Android phones sold in 2-3 years will be under $400?

.

If OnePlus can sell flagship Android at $299 and make a profit, so can brand names like Sony, HTC, LG and Samsung. Though, is Samsung willing to disrupt its own profit margin? They have the most to lose.

L.”[/I]

Stop using that flawed analogy...

For the 7 millionth time, OnePlus One do not sell the phone in retail stores or physically in other countries. They purposely sell at a low price to gain attention, that is NOT a sustainable business model.

Like we have told you so many times, an item brought into the country physically and given to retail chains require extra marketing and distribution costs putting the price up. Plus as you are now selling within said country you are paying import taxes, duties, customs and off course other taxes and wages to staff inside that country at that countries domestic rate...

Likewise any manufacturer would need significantly greater profit to pay for all those things. So a decent markup would be a necessity for them to sustain any business.

Factor in massive R&D costs - something OnePlus didn't have to do because essentially they were helped by OPPO (their backer) and the OnePlus is basically a Find 7a with slight design tweak case wise.

Furthermore once in retail, retail stores require significant markup to cover staff wages, store overheads etc.

Marketing / advertising costs are significantly expensive. A national TV adverts costs millions of $ and that's one country, not 30-50 countries they sell their devices in. A 30 second commercial during SuperBowl would cost Samsung and the rest more money alone than OnePlus has in profit selling ALL their devices so far. Indeed they would need to sell another 3.5 million devices at current level of profit to afford 1 adverts during superbowl.

And we haven't even factored in print media advertising yet...

When a company like Samsung has to allocate $50-100 million in marketing their 2 flagship devices worldwide alone, can you not get your head around understanding that there are greater reasons why a device costs what it does outside of manufacturing costs...


So your $300 making single figure profit being sold online only from China, is just NOT comparable in any shape or form to others.

It's just a ridiculous that you keep using it as your point of reference at this stage, and shows a totally naive understanding of business models.


-------------///----------

So let me spell this out in a way you will understand.

Take your beloved OnePlus one.

Assume they decide to sell like Samsung, Sony or HTC.

First they would need to put up price of their device so they can pay for proper sales / marketing and distribution hubs inside each country. Paying staff in those countries average salaries which are 8x the domestic salary in China.

So your $300 has to go up to $350

Then pay proper duties and taxes on those goods inside that country (currently being circumvented) so your $350 goes up to $400

Then we will have our own retail stores but we need to pay rent on those building, kitting out costs and staff wages.. Your $400 is now $450

But we also want to sell in other retail stores and carriers who like a 25% markup themselves, so we go from $450 - 550

Now because of all these extra costs we need clearly to market this device massively and get it into everyone's attention, forums and social blogs out. Newspaper, magazines, TV, cinema, billboard advertising in... But we need to pay for this so your $550 suddenly goes to $600-650

Hey presto your at the level of other flagships by the bigger manufacturers and yet your original cost was the same, but the ancillary expenditure needed to put it on the same playing field as the rest means your device costs double.

This is business..... This is retail... This is logistics... This is marketing 'globally'

 

[I7guy]

majority of Android devices under $400 is very different from

majority of flagship Android devices under $400.

The point is the price for high end Android smartphones will drop in the coming years. Samsung will struggle selling their flagships at $700 when others sell devices with similar specs at half the price.

This is good news for consumers. Price competition has brought down prices for things like digital camera, HDTV and laptops. Smartphone is likely to be next.

If OnePlus can sell flagship Android at $299 and make a profit, so can brand names like Sony, HTC, LG and Samsung. Though, is Samsung willing to disrupt its own profit margin? They have the most to lose.

Lenovo has to create an "independent" subsidiary in order to follow Xiaomi strategy:

“We want to build a pure Internet-oriented model,” he said. “If we do this kind of model within the current Lenovo, there is a lot of conflict with existing channels and carrier partners. With a different team mechanism, we can do whatever we want.”

Not entirely true. Manufacturing competition, efficiencies and yields of some of the most used electronic components have contributed to the finished manufactured product costing way less than in years past.

You seem to visualize a downward price spiral with flagship phones, when there is no reason for manufacturers to lower the price to recoup their investments.

Oneplus one internet only model is not sustainable in the US. Without any US retail chains those that rely on mission critical support such as myself will avoid this brand entirely.

 

[Savor]

I just read MediaTek is now wanting to target the US market and even have their own office there in San Diego where Qualcomm is based. In the US, Qualcomm dominates in that CARRIER-DRIVEN market. MediaTek dominates in Asia where most countries go prepaid or have to buy phones fully unlocked. MediaTek chips are far more inexpensive. I am no fan of MT because they never release their source code which means phones will rarely get updated to the new Android firmware. But for people who find updates overrated and more hassle than benefits, MediaTek is quite serviceable enough esp for everyday tasks. They definitely made some inroads with their 6595 chip.

If MediaTek does start catering to the Western markets, this is where the sub-$100-$200 will be born from and where MediaTek can dominate. Most average joes and janes don't know anything about the SoC chip inside let alone the firmware they are using. Price is usually the numbers that is the most important to them. For me, it is up to the silicon manufacturers like Intel and MediaTek to start producing cheaper but effective SoC's. Once sales start dominating from them in the lower segment, then perhaps a company like Qualcomm can follow suit which can turn the tide for prices of flagships.

 

[Technarchy]

I just read MediaTek is now wanting to target the US market and even have their own office there in San Diego where Qualcomm is based. In the US, Qualcomm dominates in that CARRIER-DRIVEN market. MediaTek dominates in Asia where most countries go prepaid or have to buy phones fully unlocked. MediaTek chips are far more inexpensive. I am no fan of MT because they never release their source code which means phones will rarely get updated to the new Android firmware. But for people who find updates overrated and more hassle than benefits, MediaTek is quite serviceable enough esp for everyday tasks. They definitely made some inroads with their 6595 chip.

If MediaTek does start catering to the Western markets, this is where the sub-$100-$200 will be born from and where MediaTek can dominate. Most average joes and janes don't know anything about the SoC chip inside let alone the firmware they are using. Price is usually the numbers that is the most important to them. For me, it is up to the silicon manufacturers like Intel and MediaTek to start producing cheaper but effective SoC's. Once sales start dominating from them in the lower segment, then perhaps a company like Qualcomm can follow suit which can turn the tide for prices of flagships.

That's a tough sell for a couple of reasons. Size and money being big factors.

They have to get around the negotiating power and global reach of Intel, Qualcomm, Samsung and Apple.

In case anyone is wondering, Meditek is also a Taiwanese company, not Chinese.

 

[k995]

The majority of flagship Android phones sold in 2-3 years will be under $400 off-contract?

Fact or Fiction?

This is already a FACT in the world biggest and third biggest smartphone market. China and India. Will it also become a norm in the West also by 2017/2018?

Iphone 5s new 2014 : 6/700€ now 400(used) /500€ new
Iphone 5 new 2013 : 650/700 now 250(used)/350 (new)

Nexus 5 : new 2014 : 350/400 now : 250(used)/350(new)


I would think all phones android or not are already following that trend.

 

[Vegastouch]

The majority of flagship Android phones sold in 2-3 years will be under $400 off-contract?

Fact or Fiction?

This is already a FACT in the world biggest and third biggest smartphone market. China and India. Will it also become a norm in the West also by 2017/2018?

Hopefully but i doubt it.

 

[jrswizzle]

majority of Android devices under $400 is very different from

majority of flagship Android devices under $400.

The point is the price for high end Android smartphones will drop in the coming years. Samsung will struggle selling their flagships at $700 when others sell devices with similar specs at half the price.

This is good news for consumers. Price competition has brought down prices for things like digital camera, HDTV and laptops. Smartphone is likely to be next.

If OnePlus can sell flagship Android at $299 and make a profit, so can brand names like Sony, HTC, LG and Samsung. Though, is Samsung willing to disrupt its own profit margin? They have the most to lose.

Lenovo has to create an "independent" subsidiary in order to follow Xiaomi strategy:

“We want to build a pure Internet-oriented model,” he said. “If we do this kind of model within the current Lenovo, there is a lot of conflict with existing channels and carrier partners. With a different team mechanism, we can do whatever we want.”

That would imply that these companies would make "flagship" devices and sell them at under $400.

Almost by definition, a flagship device is NOT priced under $400.

How are you defining flagship device? I see it as the top of the line product an OEM sells in a category (i.e. GS5/Note 4 for Samsung). For the Xiamoi's of the world, their top device might be in the $400 range.

Essentially then, your argument is that Xiaomi and others will sell more devices than Samsung or HTC. I don't see that happening either. Like I said before, you underestimate brand loyalty and marketing.