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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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30 Comments

1. notfair

Posts: 767; Member since: Jan 30, 2017

What a load of trash are these BayStreet analysts, this is total bullish, stop encouraging 1000$+ phones. How about you keep them at half price and let us upgrade more often and you would still have profits instead of being greedy corporate fuicks that are making investors richer everyday.

posted on Aug 21, 2018, 9:41 AM 1

2. Rigmaster

Posts: 234; Member since: Jan 22, 2018

It's not just that people hold onto phones longer, it's that there also now exists a fairly robust mid-level market of devices that are good enough and another market of higher-end devices made by lower-priced competitors. The top-end buyers will always be there, but the mid-market is where most of the action will be down the road.

posted on Aug 21, 2018, 9:43 AM 4

3. cmdacos

Posts: 4333; Member since: Nov 01, 2016

As long as there is value there in the price, I have no problem paying to play. Note 9 does that for me more than any other, it's not close. I wouldn't pay any more than 600 to 700 for any other OEM as the value is not there.

posted on Aug 21, 2018, 9:52 AM 4

22. darkkjedii

Posts: 31628; Member since: Feb 05, 2011

Well said.

posted on Aug 21, 2018, 4:02 PM 3

5. Poptart2828

Posts: 463; Member since: Jan 23, 2018

I paid 1600 for two phones but they offered truly cutting edge tech not found anywhere else so I'm happy with purchase

posted on Aug 21, 2018, 9:57 AM 0

6. mahima

Posts: 743; Member since: Nov 20, 2014

Apple. The provides the fastest and longest lasting updates to its smartphones,..... And reduced something along the way

posted on Aug 21, 2018, 10:45 AM 1

8. MarvzIsFallen

Posts: 646; Member since: Aug 11, 2017

Do not buy Samsung products because they will reduce thier prices in just 3 months.

posted on Aug 21, 2018, 10:46 AM 2

15. izim1

Posts: 1607; Member since: Feb 04, 2013

Got 2 s8's year ago for BOGO, making them around 400 each after taxes. Just traded one in for tmos 500 offer on the note9. Basically made 100 profit on it and got the note9 for 500 plus the goofy headphones that i plan to unload on Ebay for another 100 or so. Going to be hard to beat that in 3 months. You just have to be smart about spending your money. Which you clearly arent.

posted on Aug 21, 2018, 1:34 PM 5

23. darkkjedii

Posts: 31628; Member since: Feb 05, 2011

Ok, I’ll remember that before I order my Note 9......oops too late.

posted on Aug 21, 2018, 4:03 PM 3

11. baldilocks

Posts: 1545; Member since: Dec 14, 2008

Just another pro-Apple article by PhoneArena. Move along, nothing to see here.

posted on Aug 21, 2018, 12:08 PM 4

14. domfonusr

Posts: 1094; Member since: Jan 17, 2014

$325 a year per person on phones?! That is insanity. Even if you are getting the most up-to-date tech on your phones you buy, that is at nearly 10 times the expense of what you could be getting the basic smartphone experience for, and I don't think the basic experience is only 10% of the complete up-to-date experience. When I add up all of my expenses on devices, upgrade fees, and accessory purchases, I have managed to spend just under $30 a year on phone stuff! At least, for the last 6 years, that has been the case with me. Before that I spent more.

posted on Aug 21, 2018, 1:12 PM 0

16. izim1

Posts: 1607; Member since: Feb 04, 2013

So in the past 6 years youve only spent less than 180 on phone stuff and are still getting the basic smartphone experience of 2018?... really?... you sure you dont want to make up some new numbers, there, sport?

posted on Aug 21, 2018, 1:39 PM 0

19. domfonusr

Posts: 1094; Member since: Jan 17, 2014

I had to go back to my records on the subject, and did in fact find that I had underestimated my device costs by misremembering the prices of two devices in that time period. Back in 2013, I spent nothing, and got an LG Viper 4G LTE from a friend who had switched carriers and decided to give me his old phone. I had that for almost three years before I spent $29.99 to buy a Motorola Moto E 2nd Gen. with LTE (I had put in $19.99 for the device cost in my calculations, but having just checked the records, I did find that it had, in fact, cost me $29.99) on Cricket, and a further $20.00 on a belt holster/pouch for it. That lasted me almost another two years, and then this past January I upgraded to an LG Fortune, which cost $39.99 (I had originally put this in my calculations as $29.99, but after checking the records, I see clearly now that I had remembered wrong), but I also bought a new belt case for $4.99, and had to pay Cricket's $25.00 upgrade fee. I am still using that phone, and plan to be for the next year-and-a-half or so, and so, since January of 2013, I have spent a grand total (minus taxes, but including upgrade fees) of $119.97 on smartphones, accessories, and upgrade fees in the years since then. Before 2013, I was a big fan of Nokia products, and the money flowed more liberally. Between 2007 and 2010, I spent $649.99 on smartphone device costs alone, without factoring in accessories or upgrade fees (which I did not keep track of back then). So, clearly I spent more money back then, which was unwise. No wonder I ended up going bankrupt... my ex-wife helped to get me to that point while she was married to me, as she spent loads more than I did, but still, I didn't have the gonads to tell her "no" when she wanted to spend almost all of our money. I am still using the same Bluetooth headset that I was using in 2010, so I've not had any new expenditures in that department.

posted on Aug 21, 2018, 2:40 PM 1

28. yalokiy

Posts: 1113; Member since: Aug 01, 2016

Sounds like you are jumping between extremes of overspending to underspending.

posted on Aug 22, 2018, 2:10 AM 0

29. domfonusr

Posts: 1094; Member since: Jan 17, 2014

Better to underspend than to overspend. I'm never going bankrupt ever again...

posted on Aug 22, 2018, 7:00 PM 1

17. izim1

Posts: 1607; Member since: Feb 04, 2013

I had an m7 developers edition that i bought for 700 on feb2013. Used it until last march when i bought the gs8 on BOGO. Just traded that for 500 credit on the note9 which i plan on keeping for 2 years or more. Thats 700(m7de)+400(BOGO s8)+500(note9 after tmo promo credit)=1600÷8years. 200 a year. Not something I'm particularly proud of, but i suppose it's not bad considering cell plans went down when phones stopped being subsidized.

posted on Aug 21, 2018, 1:51 PM 0

18. yalokiy

Posts: 1113; Member since: Aug 01, 2016

If you sell or trade the note 9 the number will be much smaller.

posted on Aug 21, 2018, 2:04 PM 0

21. TerryD

Posts: 560; Member since: May 09, 2017

I used to get the flagship every year but prices of monthly deals kept creeping up. As a result I shop around and try to spend the same as the previous contract which nowadays ends up being a cheaper phone.

posted on Aug 21, 2018, 3:46 PM 1

24. apple-rulz

Posts: 2198; Member since: Dec 27, 2016

Just buy what you want and feel you can afford and enjoy, don’t overthink it.

posted on Aug 21, 2018, 5:24 PM 1

25. mixedfish

Posts: 1567; Member since: Nov 17, 2013

It is because the sales come from those who buy on plans. The fools don't realise that just because you pay by the month it is still the same dollar out of your bank. But I invite more fools to buy these $1000 phones, it helps our economy.

posted on Aug 21, 2018, 6:00 PM 1

26. Jrod99

Posts: 778; Member since: Jan 15, 2016

I got about 400 bucks in gift cards to knock price down. That’s at Walmart and not sure when they will get a x plus. 1000 bucks is a tough pill to swallow. It’s definitely a 3 year phone for me.