Why do mobile phones cost so much?

biron_w

biron_w

biron_w

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This may be a stupid question but i'm genuinely confused.
The new nexus tablet costs £159 for the cheapest one and that comes with:
7” 1280x800 HD display (216 ppi)
Back-lit IPS display
Scratch-resistant Corning glass
1.2MP front-facing camera
198.5 x 120 x 10.45mm
340g
WiFi 802.11 b/g/n
Bluetooth
8/16 GB internal storage
1 GB RAM
Micro USB
4325 mAh (Up to 8 hours of active use)
Android 4.1 (Jelly Bean)
Quad-core Tegra 3 processor
Microphone
NFC (Android Beam)
Accelerometer
GPS
Magnetometer
Gyroscope

Yet a phone of similar specs say the galaxy s3 will cost at least £400 brand new. Does it really cost that much just so a device can connect to a phone network?
 
The Nexus 7 is being built at around cost price, subsidised by (Google hopes) sales through the Play Store. Mobile phones are sold at a higher price sim-free because they tend not to be subsidised. In addition, I believe that there are more licensing issues around phones because of the patents related to cellular communication.
 
Nymins said:
Phones are smaller. Costs more to squeeze the same specs into a much smaller space.
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This. You only have to look at ultrabooks compared to standard laptops to see the difference a relatively small size difference can make.

7" to 4.5" is a big difference.
 
I'd agree that it's more to do with market value and markup rather than technology. Mobile phones have always been expensive, even when they hit a plateau before 'proper' internet phones came along. The 8310 was £300 and didn't really do anything different than a £100 phone or a 3 year old phone did. The fact that there's been £10 phones for a long time also suggest this. The obvious example is the cost of an Ipod touch + the cost of a £10/20 phone compared to an iphone. It's pretty much the same figures for the Galaxy S MP3 player compared to a SGS 2 or 3/

EDIT: thinking about it a bit more, i'd say it's partly to do with the fact that most people who have an expensive phone, have it on contract so the manufacturers just charge the networks more because they know the network needs the phone, and also because, the network probably wouldn't pass any savings on to the customer if the phones were cheaper. Not many people buy a £400 sim free. the genral public I mean, not so much people here :p. Strange example but it's why vet bills now cost so much. It's because most people pay into a pay-monthly scheme so the vets just up the cost. The insurance company charge more per month to cover it but the only person who sees a big bill, is the person who wants to pay cash.
 
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The Nexus 7 is being sold at cost.

Also phones are smaller, generally have better camera optics and need to license a lot more patents.
 
Skeeter said:
I can buy a considerably more powerfull laptop for less than the sim free price of a Galaxy S3.

Including a Windows license.
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Yes but size. SIZE. Don't underestimate the difference this makes in price. It's really pointless comparing the price of a small incredibly mobile device to something larger than an a4 folder.

Phones are catching up with computer specs at an alarming rate. Quad core processors and 1gb RAM? They are advancing faster than both desktop and laptop computers in my opinion.
 
mame said:
I'd agree that it's more to do with market value and markup rather than technology. Mobile phones have always been expensive, even when they hit a plateau before 'proper' internet phones came along. The 8310 was £300 and didn't really do anything different than a £100 phone or a 3 year old phone did. The fact that there's been £10 phones for a long time also suggest this. The obvious example is the cost of an Ipod touch + the cost of a £10/20 phone compared to an iphone. It's pretty much the same figures for the Galaxy S MP3 player compared to a SGS 2 or 3/

EDIT: thinking about it a bit more, i'd say it's partly to do with the fact that most people who have an expensive phone, have it on contract so the manufacturers just charge the networks more because they know the network needs the phone, and also because, the network probably wouldn't pass any savings on to the customer if the phones were cheaper. Not many people buy a £400 sim free. the genral public I mean, not so much people here :p. Strange example but it's why vet bills now cost so much. It's because most people pay into a pay-monthly scheme so the vets just up the cost. The insurance company charge more per month to cover it but the only person who sees a big bill, is the person who wants to pay cash.
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I'm not sure thats true considering there are only three smartphone companies making a profit at the moment! On the other hand the networks must be making even more than they used to in many respects. My old dumphones were about £400 sim free (k800, k850) and were free on £30-35 12 month contracts, now you need at least an £18 month contract to get one free!

But yes, the Nexus 7 is built to a cost, much like the San Francisco and Monte Carlo were, similar specs to the top end phones but significantly cheaper. I'm guessing the build quality isn't particularly up to scratch on the Nexus either.
 
It has nothing (really) to do with being smaller blah blah blah. It's profit.

http://www.appleinsider.com/article...oost_with_90_of_mobile_industrys_profits.html

It's crazy that Apple has 75% of the TOTAL MOBILE INDUSTRY profit yet only 9% of the marketshare.

£500 seems to pretty much be the end point that carriers will subsidise at the £35-£40/month contract price (now mostly at 24 months instead of a few years ago 18 months).

So in summary: they are expensive because people are dumb enough to pay for it.
 
Fillado said:
So in summary: they are expensive because people are dumb enough to pay for it.
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This is the harsh truth.

I got a HTC Sensation free on a 12 month £30 a month contract.

Can you get an iPhone for anywhere near that? And even if you could, is the iPhone going to cost nearly as much to make considering the specs and the sheer volume in which they are produced.

I know they are extreme examples in that the HTC deal was brilliant, and the iPhone has always been disproportionately expensive, but it just shows that the biggest factor in setting a phones price is how much the makers think they can get away with charging.
 
Another thing to factor is the quality of the screen screen. I bet the S3 wipes the floor with the new Nexus tablet.
 
Grrrrr said:
Another thing to factor is the quality of the screen screen. I bet the S3 wipes the floor with the new Nexus tablet.
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Actually, I think 'wipes the floor' is a step too far. The IPS panel on the Nexus 7 is pretty good by all accounts.

Zefan said:
Do you honestly think it's all to do with how much the physical components of the device cost to produce? It's more to do with the R&D, the marketing, the software development... think about it man.
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Yeah, the iPhone is only really an outrageous price on some networks deals too, and the HTC Sensation in his example didn't sell very well and wasn't all that great, so ended up being dirt cheap on some deals.

Apple keep their prices high, but the initial price is usually the same as competitor products. There are also a lot of other things to consider as well.
 
Skeeter said:
This is the harsh truth.

I got a HTC Sensation free on a 12 month £30 a month contract.

Can you get an iPhone for anywhere near that? And even if you could, is the iPhone going to cost nearly as much to make considering the specs and the sheer volume in which they are produced.

I know they are extreme examples in that the HTC deal was brilliant, and the iPhone has always been disproportionately expensive, but it just shows that the biggest factor in setting a phones price is how much the makers think they can get away with charging.
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People are willing to pay stupid prices, more so when it comes to something like a iPhone. Almost any contract you find would be so much cheaper to just get it sim free + sim only, but people pay. My uncle pays around £35 + £199 for a 4s, this was a upgrade price, he really does nothing intesive with his phone and his 4 was perfectly fine. But poeple are willing to pay to have the newest tech.

I wouldnt say the current hardware advance have much to do with this, look few years back when things like the N95 was released which costed around £499 - £600.
 
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