Why do phones cost so much now?

[dontpanicbobby]

Is there a new element that OEMs added?

Unobtanium is a thing now...

Who can put out $1700 for a thick phone?

 

[Hadron]

They cost what the manufacturer thinks they can get away with charging. It's just profit maximisation, nothing else.

If you wanted one trend to explain it it's that unit sales have been falling for a while, and so to maintain profits they try to charge more for those they do sell. And it helps if a few big players do this as it then lets others raise their prices but still look cheaper.

Of course if you are talking about the US market in particular I have the impression that there have been changes to the way phones are financed, but as I'm not involved in that market I can't really say anything useful there. But there has been a long term trend in markets that have used the "subsidised phone on a contract" model to reduce the subsidies (and, certainly in the UK, lengthen the contracts), which is understandable as the market saturates: if you can't use a subsidy to grow your numbers any more, you cut it to increase your profit per subscriber.

Anyway, that's my take as an amateur observer with no inside knowledge of the market.

 

[dontpanicbobby]

Amateur? You! I find that hard to justify.

Back on topic:

How much is a truly flexible screen worth?
Not $700 surely.

 

[Unforgiven]

They cost what the manufacturer thinks they can get away with charging. It's just profit maximisation, nothing else.

I would have said "because idiots keep paying the prices," but your way is much more diplomatic.

Of course if you are talking about the US market in particular I have the impression that there have been changes to the way phones are financed, but as I'm not involved in that market I can't really say anything useful there. But there has been a long term trend in markets that have used the "subsidised phone on a contract" model to reduce the subsidies (and, certainly in the UK, lengthen the contracts), which is understandable as the market saturates: if you can't use a subsidy to grow your numbers any more, you cut it to increase your profit per subscriber.

Some carriers are still offering subsidies, they are just structured differently than before (e.g. rebates, exclusives, etc.).

 

[dontpanicbobby]

Probably a US only thing.

 

[Hadron]

How much is a truly flexible screen worth?
Not $700 surely.

To me, no.
It probably will be to somebody. Whether it will be to the million somebodies that Samsung reportedly expect I don't know.

I think the way I look at this device is "a small tablet that can be folded over to fit in your pocket and can act as a phone when folded". Looked at that way I'm sure there is a market. The question is, what compromises are you prepared to accept to get that, and how much are you prepared to pay, especially given those compromises?

I doubt it will be a truly rational choice for anyone to buy it: you'll be able to buy both a better phone and a better tablet for less than the price of this device, and as a first generation device there will be a lot of unknowns. But it will also be the first genuinely new form-factor we've seen for a while, which makes it interesting in itself, and more interesting to see how it develops. But I'll be watching from the sidelines rather than joining the game .

 

[no one]

If people will pay $15ish for a pet rock, you can pretty much sell them anything, at any price.

 

[dontpanicbobby]

I couldn't afford one.
Used the could though.

• OT: 2008 took my money.

 

[Deleted User]

Inflation. And the fact that there will always be people who want the latest and greatest every couple of years.
I wouldn't fork out that much cash, but plenty would.

 

[dontpanicbobby]

I'm an early-adopter. I look for that tweak.

 

[KBU2]

https://www.google.com/amp/s/thecon...nd-thats-why-trumps-trade-war-is-futile-99258
Boils down to greed

 

[Hadron]

Greed is the basis of the Western capitalist model. It's baked in to the legal duty of the chief exec of a publicly-owned company, to maximise returns to shareholders, and if you can get away with price rises that are utterly unrelated to the price of providing the goods (where "get away with" means "find enough people willing to pay them") then that principle actually demands such "greedy" behaviour.

I'm not condoning or defending this, just pointing out that it's a logical, indeed inevitable, consequence of particular societal decisions.

 

[bcrichster]

If people will pay $15ish for a pet rock, you can pretty much sell them anything, at any price.

Right?! Look at AAPL devices, Lol. And then Shamsung raises their prices to match. Unfortunately it's about to get much worse next year if/when Sprint T-Mo merge.. I think part of that will end up with devices reach ridiculous prices like what At&t, VZW charge ppl for their devices. Right now, T-Mo and Sprint devices are literally the cheapest of most carriers but the merger will kill that competition so they'll be ABLE to charge us stupid prices for basic stuffs. I could be wrong of course but I feel I see the writing of this situation ahead of time. It's probably gonna get worse..

 

[dontpanicbobby]

Who you trying to get crazy with hesay?

To much dinero...

1000 units maybe.

If development was under a half million maybe.

 

[bcrichster]

Who you trying to get crazy with hesay?

To much dinero...

1000 units maybe.

If development was under a half million maybe.

Agreed.. Too much money!

 

[Hadron]

Right?! Look at AAPL devices, Lol. And then Shamsung raises their prices to match. Unfortunately it's about to get much worse next year if/when Sprint T-Mo merge.. I think part of that will end up with devices reach ridiculous prices like what At&t, VZW charge ppl for their devices. Right now, T-Mo and Sprint devices are literally the cheapest of most carriers but the merger will kill that competition so they'll be ABLE to charge us stupid prices for basic stuffs. I could be wrong of course but I feel I see the writing of this situation ahead of time. It's probably gonna get worse..

Actually where I am the biggest scam is what the carriers charge for subsidised phones. Taking a phone on a contract is far more expensive over the duration of the contract than buying the phone outright and getting your service plan separately (a "SIM only" deal), but not everyone can afford the up-front cost of the phone. So as with many things, if you haven't got the money you end up paying more

Of course the real trick is not to be an early adopter: unless you are buying Apple (whose prices are fixed all year) you get a much better deal by waiting until a phone has been out for a few months, in addition to which you won't suffer any of the glitches that the first production runs of so many phones seem to be have.