It's official, phone prices hit a record in 2017, buoyed by the Note 8 and iPhone X

It's official, phone prices hit a record in 2017, buoyed by the Note 8 and iPhone X
Ever since smartphone subsidies were removed by carriers, we've seen a much more pronounced rise in flagship phone prices, until we reached "the year of the $1000 phone" with the iPhone X or Note 8. Not only has the concept of the $400 flagship gone the way of the dodo bird, as Chinese makers have also increased their starting tags, but there's never been a launch price increase for high-end handsets as drastic as last year.

As if to confirm this observation, research firm GfK ran the numbers, now that 2017 is behind us, and made the record increase in phones' average selling price (ASP) official. It turns out that the ASP increased a full 10% year-on-year, to $363, while the number of phones sold globally increased just 1%. The ASP increase was less drastic in North America, but places like China and Eastern Europe bore the brunt of it.

Retail prices for high-end phones from the big three brands in the US - Apple, Samsung and LG - have been steadily rising from the very beginning of the race when the OG iPhone was introduced to our unsuspecting wallets, as you can grasp from the last chart below. That one was $500 at launch, but now the iPhone 8 starts at $700, and you are left with a dollar. The first Samsung Galaxy was also priced $500, while last year's Galaxy S8 blasted off at the shameful $750. When we add expensive, but popular outliers like the Note 8 or iPhone X, we can easily explain the record average phone pricing increase registered last year.

As you can see in the slides below, every major phone's successor last year was more expensive than the previous edition, sometimes drastically so, raising the average year-on-year price significantly, to the highest ever. We aren't even including Google's own phone line, which used to be the best value-for-money before the search giant decided to vertically integrate, and we are now left with a Pixel 2 XL that costs north of a thousand euros, for instance. 

There are plenty of reasons which can be cited for that jump, and corporate greed is not even highest on the list - 2017 phones got drastically overhauled in terms of design and materials used, 18:9 HDR displays became obligatory, and the basic storage amounts got bumped. Still, we hope that this unpleasant trend of ever-rising smartphone prices doesn't continue this year, as people are already at the limit they are willing to spend on a handset.


source: GfK

Related phones

Galaxy Note 8
  • Display 6.3" 1440 x 2960 pixels
  • Camera 12 MP / 8 MP front
  • Processor Qualcomm Snapdragon 835, Octa-core, 2350 MHz
  • Storage 64 GB + microSDXC
  • Battery 3300 mAh(22h talk time)
iPhone X
  • Display 5.8" 1125 x 2436 pixels
  • Camera 12 MP / 7 MP front
  • Processor Apple A11 Bionic, Hexa-core, 2390 MHz
  • Storage 256 GB
  • Battery 2716 mAh(21h 3G talk time)

FEATURED VIDEO

10 Comments

1. Finalflash

Posts: 4062; Member since: Jul 23, 2013

They've all realized that they can't get people to keep upgrading phones without the heavy subsidies of the past. So they intend to milk the top tier as much as they can. Which makes sense, since those are the people willing to pay a premium to surf Facebook and browse the web.

3. sgodsell

Posts: 6737; Member since: Mar 16, 2013

In all honesty the vast majority of smartphones sold are mid and low end smartphones. That is the vast majority of Androids bread and butter. Apple has a different story and out of the 1.46 billion sold (still need to see Q4 smartphone numbers), Apple has slightly over 2X0 million iPhones to Androids 1.2X billion or more smartphones for 2017.

2. Jacksie66 unregistered

Paid €520 for my xz premium when it came out. Got it off a guy who knew a guy who knew a guy who worked for Sony. Paying almost double that for a phone that does nearly the same thing is insane. If you pay nearly €1000 for a phone you're just doing it so you can tell people you spent nearly €1000 on a phone..

4. mixedfish

Posts: 1542; Member since: Nov 17, 2013

As the old adage goes "There's a sucker born every minute"

5. Settings

Posts: 2942; Member since: Jul 02, 2014

If I want to spend $1000 on a phone, I'll just make sure it does have everything I ever need; ergo iPhone X is a joke to me.

6. darkkjedii

Posts: 30786; Member since: Feb 05, 2011

The Note 8 is easily worth $930, and I mean easily. It does it all, has great battery life, and that heavenly S-Pen mannnnnnnn.

7. L0n3n1nja

Posts: 1511; Member since: Jul 12, 2016

I think it's worth more than the competition no doubt, and it's a one of a kind beast, but no phone is really worth that price IMO. The Note line costs $200 more than it did a couple years ago. It was always the top of the line.

9. southernzombie

Posts: 352; Member since: Jan 17, 2017

you got to remember tho, components are getting more expensive as time goes on too, granted the inflation has been a little steeper than it probably should be. things will continue to get more expensive as the cost of the parts to make them goes up. but apple did set a bit of a consumer unfriendly precedent with the pricing of the iphone x because the whole industry tends to follow suit with what apple and samsung do.

10. chenski

Posts: 738; Member since: Mar 22, 2015

For you maybe, but not for everyone. This is why I am a fan of companies like one plus who continues to undercut the big boys

8. worldpeace

Posts: 3092; Member since: Apr 15, 2016

I want to see Nexuses price in that graph (since Pixels also there). As I remember, Galaxy nexus S is under $300, while Nexus 6 is around $500

Latest Stories

This copy is for your personal, non-commercial use only. You can order presentation-ready copies for distribution to your colleagues, clients or customers at https://www.parsintl.com/phonearena or use the Reprints & Permissions tool that appears at the bottom of each web page. Visit https://www.parsintl.com/ for samples and additional information.