As Americans balk at $700+ flagships, Samsung may refurbish the S8 as midranger

As Americans balk at $700+ flagships, Samsung may refurbish the S8 as midranger
It was somewhat inevitable, and easy to predict, but now it's unfurling before our very eyes. People using their phones longer, that is. After the demise of the two-year cell phone contract, and when the full price of a phone without carrier subsidies was oh-so-painfully revealed to us, the length of time that subscribers kept their current handsets started to gradually increase.

Top-tier manufacturers like Apple and Samsung predicted and sensed the upgrade slowdown, and started raising prices to offset the slump in demand for the latest and greatest. This culminated in last year's $999 iPhone X or $930 Note 8, but it is actually backfiring, as last quarter saw the first ever drop in smartphone shipments on record. 

Now, there is a statistic to explain why is all of this happening, and it shows that people are just keeping their phones longer, buying refurbished or second- and third-hand devices, and generally not willing to splurge a grand on a phone, or thereabouts. Back in 2014, people were still upgrading their phones every 23 months, in sync with the two-year contract subsidies. This year, the length of time between upgrades is projected to hit 33 months, or nearly three years.


Moreover, the fastest growing segment in smartphone sales are now refurbished handsets. B-Stock, a wholesale auction house of refurbished, returned and second-hand electronics, says that, while half of its lots went to developing markets in India or Africa as recently as 2013, now 93% of all refurbished phone auctions go to US buyers. As per Sean Cleland, director of mobile at B-Stock: "Smartphones now resemble the car industry very closely. I still want to drive a Mercedes, but I’ll wait a couple of years to buy the older model. Same mentality."

This hasn't avoided the attention of Apple or Samsung head honchos. Apple, for instance, is gearing up to introduce a much cheaper notch-bearer, dubbed tentatively iPhone 9, with LCD display, and a single camera, but starting from $699, or as "little" as the iPhone 8. Samsung's chief DJ Koh also noted that they are watching the rising star that is second-hand phone purchases, and are thinking of shrinking their overall portfolio of midrangers, opting for refurbishing last year's flagships instead of spending dough on developing and marketing new midrange models, at least in certain markets. 

This makes total sense, as, after the launch of the Galaxy S9, the S8 is now the more suitable phone to take the upper midrange crown in Samsung's portfolio than, say, a Galaxy A8, which has weaker specs, but is very close to the S8's price range already. Long story short, as CK Lu, a Gartner research director puts it: "It’s the worst case scenario now. Now the phones are maybe too expensive." Yeah, no kidding. 

source: WSJ (paywall)

Related phones

Galaxy S8
  • Display 5.8" 1440 x 2960 pixels
  • Camera 12 MP / 8 MP front
  • Processor Qualcomm Snapdragon 835, Octa-core, 2350 MHz
  • Storage 64 GB + microSDXC
  • Battery 3000 mAh(30h talk time)
Galaxy S9
  • Display 5.8" 1440 x 2960 pixels
  • Camera 12 MP / 8 MP front
  • Processor Qualcomm Snapdragon 845, Octa-core, 2800 MHz
  • Storage 256 GB + microSDXC
  • Battery 3000 mAh(31h talk time)

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19 Comments

1. SYSTEM_LORD

Posts: 1168; Member since: Oct 05, 2015

Flags are overpriced anyways. I'm looking at the Nokia 7 Plus or the Xiaomi redmi note 5 pro. The nod is looking to go to Nokia, though.

2. Cat97

Posts: 1804; Member since: Mar 02, 2017

Using last year flagship as this year's midrange will not work for Samsung, because the S8 and S9 are just too similar. The S7 is perfectly useable as midrange, though, but its camera is 99% as good as the S8 and 90% as good as the S9, so selling that with a low price will also eat into their flagship sales.

8. Bozzor

Posts: 248; Member since: May 02, 2012

For people who do not play games and do not use VR, the Samsung S6 and the iPhone 6s remain very usable everyday phones.

9. Boast_Rider

Posts: 534; Member since: Sep 14, 2017

They are very usable, but the battery life is absolutely horrendous on the S6. And the iPhone 6s doesn't score very high marks in efficiency either.

4. tiara6918

Posts: 2263; Member since: Apr 26, 2012

I used to upgrade phones almost every single year till I realized how stupid and impractical it was. Phones these days perform more or less the same.why still get an s class when most features are already in the e and c

14. bucknassty

Posts: 1318; Member since: Mar 24, 2017

only way to get people to upgrade is make features unique to the newer model i.e. face unlock... but it can only last so long. i told my friend when he got the X that he could do the animoji while covering the sensors and just use the camera... he wasn't too happy about that

5. Nikolai90

Posts: 50; Member since: May 16, 2017

Phonearena detected this. Now, this greedy major Manufacturers such like Apple and Samsung will increase again the price of iPhone 7 and Samsung Galaxy S7, iPhone 8 and Samsung Galaxy S8 to eat more "gluttony". Yes,spotted. Who is willing to give up both their kidneys to pay for USD 999 or USD 930 phones? Few still might but most of consumers are getting more intelligent on how to purchasing flagship grade phone; or precisely a former flagship phone.

6. hafini_27

Posts: 945; Member since: Oct 31, 2013

2 to 3 year is the practical update cycle. It's not worth updating yearly.

7. SayMobile

Posts: 156; Member since: Jan 29, 2014

It is apt and absolutely fine to use a phone for 3 years, its because of Apple iphone fans who flock to buy every new device that the comes out that Android is feeling pressure tend to get the Maths wrong

16. rouyal

Posts: 1573; Member since: Jan 05, 2018

Wrong

11. theborg48

Posts: 5; Member since: Nov 26, 2016

A simple solution is to wait six+months for a price decrease, THEN purchase your favoured phone. Assuming of course that the phone of one's choice is available.

12. TheOracle1

Posts: 2151; Member since: May 04, 2015

My Xiaomi Mi Mix 2 cost me $450 and is excellent. Quality materials, well built, top-notch hardware, beautiful design, unlimited monthly software updates and excellent battery life. For $500 more I would get waterproofing and a better camera from Samsung/Apple. Is that worth an extra $500? I say no. Heck I could just buy a One Plus 5 or 5T with the extra money.

15. redmd

Posts: 1917; Member since: Oct 26, 2011

The problem is that the phone is not available everywhere.

17. TheOracle1

Posts: 2151; Member since: May 04, 2015

It's available online just like every other phone.

13. gandalf_the_junkie

Posts: 32; Member since: Feb 22, 2018

Unless you're into VR or AR, I don't understand flagship phones. $200 - $350 hits the value mark for me. Then again I don't play games nor am I a camera enthusiast. I don't care about bezels.

18. mtnecho

Posts: 1; Member since: Mar 01, 2018

^^^this. Why I'm rocking a Galaxy S7 and don't see a need to upgrade until something really new hits the streets and is proven - will probably require 5G and in-screen fingerprint (I hate rear mounted readers) to get me to even consider it.

19. kanagadeepan

Posts: 1233; Member since: Jan 24, 2012

Two years back, I used to change my mobile phone every 6 months. But I am using my Lenovo P2 for almost 1.5 years (Part of the reason is no other compact 5000+ mAh battery phones are available). For my secondary number, I am using second hand C9 PRO (bought for 50% price) for almost one year. I will still go on using them for minimum 6 more months... Nowadays there is NOT much real-life difference between performance of flagship and mid-range phones, especially considering the price difference.

20. tntwit

Posts: 82; Member since: Sep 11, 2012

"Top-tier manufacturers like Apple and Samsung predicted and sensed the upgrade slowdown, and started raising prices.... ....but it is actually backfiring" Wait, you mean when demand is down, you shouldn't raise prices? Stunning, it's like what they taught us in macroeconomics was actually true!

21. tntwit

Posts: 82; Member since: Sep 11, 2012

I bought my Note 8 when it was $350 off. I can't justify paying sticker when they inevitably go on sale within a few months of release.

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