Does anyone have doubts that phone makers will shove foldable phones down our collective throat and in less than two years they will all have Galaxy S Gumby and Huawei Mate Bendy versions parallel to their non-flexing brethren? Is there any way that this new "disruption" won't raise the average phone prices even further, and, what's more, shoot the price of accidental damage repairs through the roof?
The 2018/2019 crop is the most expensive one that Apple or Samsung have ever released. Granted, we no longer have to deal with plasticky construction or puny amounts of storage, yet prices seem to have steadily risen over the past decade in a slow-boiling-frog pattern until the current versions are double the price of the originals that started it all.
Remember the days when you could get any premium phone for two Benjamins with the carrier subsidy, full retail started in the $600-$650 range, and there were even "$400 flagships" from various second-tier makers? Yeah, us neither. These times are seemingly gone and might not be coming back, as ever-increasing storage, premium hardware, and unorthodox designs have become the law of the land.
We are buying the most expensive phones ever
How did we get from the $500 OG iPhone or Galaxy S to the $1000 now asked for Apple, Samsung or Huawei flagships? Check out this Bloomberg chart of historical prices, and it is easy to see the breakout point.
It's right around 2017, and there are plenty of reasons for this happening then - a perfect storm of subsidies removal, industry cool-off, and ever-increasing competition that makes companies chase expensive components and technologies. Nobody asked for Face ID biometry that needed a notch cutout in an OLED display yet Apple decided to set itself apart with it. Ditto for a hole-in-display, sliding, dual-screen, pop-up and other "all-screen" designs. In-display fingerprint readers perform worse than the good ol' scanners on the back of the phone, yet they are becoming the pricey norm.
"Just" one camera or 4GB RAM won't do now and we are at the 12GB/1TB limit, as well as hexa-camera phones like the S10 5G or Nokia 9 PureView. Expensive AMOLED displays with a monopolistic supplier have also become ubiquitous, and don't even start us on impractical curved edges. Add to these multilayer glass coatings, reverse wireless charging, ToF cameras, and whatnot, and you got yourself plenty of marginally better experience that gets shoved down our collective throat for ever-increasing amounts.
In fact, the $400+ phone price bracket (and the $800+ one within it), was the fastest-growing segment last year, explaining why Apple and Samsung still make plenty of money from phones despite flat or declining sales, as you can see from Counterpoint's graph below.
Phone sales are flat, but the expensive ones are up
Repair prices are hitting record levels
Adding insult to the price injury, however, are the hundreds of dollars you still have to spend when your phone hits the pavement. A cracked screen of the OLED variety in the new S10 trio is north of $200, while a split glass rear of the XS Max is $600. Compare this with the replacement of the iPhone 7 Plus metal body or LCD display at half the price.
Most of today's flagships feature some sort of water-tight certification so you are basically left with very little choice but the official replacement prices if you want your iPhone or Galaxy restored up to spec. When we probed the phone makers for the panel replacement costs of their spanking new flagships, we also asked about the turn-around-time (TAT), or how long does it usually take for the whole ordeal - shipping or bringing the phone to the designated repair service places, then diagnostics, part replacement(s), and shipping it back to the owner.
Those quotes are also included, but, as you see, they are largely the same - a 2-day allowance for travel back and forth, and about 5-7 days for repair - so you will be without a phone for about 10 days on average if you choose to go the shipping route. Apple can swap your broken screen in a jiffy, though, just make an online appointment for the nearest Apple Store, eat lunch and stroll the mall, then come back in a few hours, and the screen should be replaced already.
Marginal added value, highest prices, record repairs - circa '17
As you can see, while repairs may look bearable at a fraction (or a half in the case of Apple) of the retail price for a new phone, they are also the highest flagship repair costs in history if you crack your iPhone XS Max or Galaxy S10+. Accompanied by the highest ever phone prices, this dynamic duo should make you think twice what phone you are getting and how long will you keep it.
Did you ask for Face ID? Hole-in-display? In-screen fingerprints? Six cameras? We didn't think so, but you are still getting them and will pay top dollar for the privilege to watch what's essentially a shareholder-friendly pissing contest in a flatlining market. What do you think?