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Even with the Note 9 and iPhone X at $1000, we still spend on phones the same

by Daniel Petrov

Aug 21, 2018, 9:21 AM

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. That one was $500 at launch, but the iPhone 8 starts at $700, and you are left with a dollar. The first Samsung Galaxy was also priced $500, while the Galaxy S9 took off at $720. When we add expensive, but popular outliers like the Note 9 or iPhone X with their thousand-dollar tags, we can easily explain the record average phone price increases lately.

Even in the world of $1000 high-end phones as the new normal, however, it turns out we are actually paying the same as we did before. How come? Well, it turns out we are holding to our dear phones much loner than before, say BayStreet analysts. On average, we don't upgrade them every two years as before, but between 30-36 months, depending on whose analysis you pick. Thus, we are still spending about $325 a year on our devices, or about the same as before.

Between 2014 and 2018, U.S. smartphone upgrade cycles elongated from 24 to 36 months, while premium smartphone prices increased from ~$650 to ~$1,000. Interestingly, regardless of operating system, premium customers willing to hold onto their smartphone for three years, are on a per year basis still paying ~$325 per year.

Long story short, the more expensive our phones are getting, the longer we keep them to our hearts, and the one phone maker who could be the surprise beneficiary of this trend is Apple. The provides the fastest and longest lasting updates to its smartphones, and its tick-tock upgrade cycle means it is well-positioned to take advantage of the new high-priced era, which is already showing up in its quarterly results.

via FierceWireless

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