Why are phones so expensive?

Hodders · 16 Jun 2019 at 01:14

Recent phones life the OnePlus 7 Pro are lovely, but...

£699 is a huge amount of money.

For the same cost I can buy a halfway decent Asus gaming laptop, a 50" 4k Samsung TV.

Why do they cost so much? Is it the r&d, the short model lifespan, the bill of materials?

OspreyO · 16 Jun 2019 at 03:07

People will pay it. No other reason.

Ixon · 16 Jun 2019 at 07:36

Apple is one of the main reasons we seen smartphone prices rise dramatically in the past couple of years when the iPhone X launched with the £999 price tag, others followed suite with the pricing of flagships because the none teccy general public would probably think a £600 flagship Samsung was vastly inferior to a £999 iPhone.

If Apple suddenly decided that this years iPhone 11 was priced at let say £700, everybody else would also sell their flagship's under £700.

Royal Fleet · 16 Jun 2019 at 08:01

I am not sure there is a simple pithy answer to that question.

It is a combination of
- People will pay it (early adopters)
- People will pay it (show off value)
- Huge R&D costs
- You need cutting edge components to get that much power from something that size.

Phone companies do a great job of persuading the population that they need the cutting edge phone when in reality very few people do. I bought my son a new Samsung S8 recently. It is a fantastically capable phone for a third of the cost of my latest model variant.

Minstadave · 16 Jun 2019 at 08:19

Theres plenty of bargains out there if you dont mind staying away from Apple.

Some cracking S10e/S10/S10+ deals from Three this week. Lots of impressive Xiaomi phones floating around with high end Snapdragon chipsets under £300.

I picked up a Samsung A70 when they were doing the trade in and cashback deal and that cost me £200 for a phone with a massive battery and huge OLED display.

I suspect we've largely reached "peak phone" so trying to find anything innovative is expensive.

AndyCr15 · 16 Jun 2019 at 08:35

Hodders said:
£699 is a huge amount of money.

For the same cost I can buy a halfway decent Asus gaming laptop, a 50" 4k Samsung TV.

I would say it's not all that fair to compare top end to 'half way decent'. You can get a 'half way decent' phone for £200. Can you get a gaming laptop for that? How much is a top end gaming laptop or top end 4K Samsung TV?

Royal Fleet said:
- You need cutting edge components to get that much power from something that size.

I would suggest it this. Most items, of any kind, as you get to the top end the price raises significantly. R&D costs are rolled in to this too as it's the R&D that usually get you to that top end.

Randomface74 · 16 Jun 2019 at 09:26

Prices will come down. People were willing to pay it when each upgrade was meaningful. Now upgrades are small people look more at the price. Same as CPUs.

Hades · 17 Jun 2019 at 01:43

My last two phones have cost around £200 and do nearly everything these expensive phones do. To me it is throwing money down the toilet buying a top end phone. It used to be worth it back when there were massive leaps in technology. But for the last few years what do they offer?

hyperseven · 17 Jun 2019 at 03:20

Arent there all sortas of licencing/royalty fees involved?

Rroff · 17 Jun 2019 at 03:36

Hades said:
My last two phones have cost around £200 and do nearly everything these expensive phones do. To me it is throwing money down the toilet buying a top end phone. It used to be worth it back when there were massive leaps in technology. But for the last few years what do they offer?

This is the problem I have - my original Xperia X1 (the old one) was a big leap in technology and worth it at the time, same with my Note 1 but since then the premium seems to be mostly about style over substance and the top models have become expensive accessories rather than a technical benchmark.

AndyCr15 · 17 Jun 2019 at 07:14

Hades said:
My last two phones have cost around £200 and do nearly everything these expensive phones do. To me it is throwing money down the toilet buying a top end phone. It used to be worth it back when there were massive leaps in technology. But for the last few years what do they offer?

It's a bit like cars... and PC's... and TV's.... and pretty much anything. A £200 phone will do most of what a £900 will do, but if you want those extra bits (brighter screen, wireless charging, waterproof, more processing power, smaller bezels, better build quality/materials etc) then you pay for it. If you don't need/want them, then great, don't spend more!

hardkore · 17 Jun 2019 at 07:27

In such a crowded marketplace companies have to advertise the hell out of their devices. Even with the dominance samsung, huawei and apple have, i bet the marketing budgets are in the millions for each phone release.

That will certainly be a factor.

edscdk · 17 Jun 2019 at 07:44

Obviously 699 is nit a huge sum or these devices would not sell in thiir millions.. Get a £15 phone if you cannot afford 699

IvanDobskey · 17 Jun 2019 at 08:03

It's like with anything, you can get cheap ones and expensive ones. Just pick one in the price bracket you are happy with

tom_e · 17 Jun 2019 at 08:10

edscdk said:
Obviously 699 is nit a huge sum or these devices would not sell in thiir millions.. Get a £15 phone if you cannot afford 699

It is and they will because it's not £699 it's £30-40 a month which suddenly becomes ok.
Most people with top end phones don't buy them outright, if that was the only option then they'd sell no where near the volume they do currently.

booyaka · 17 Jun 2019 at 11:03

Hodders said:
Recent phones life the OnePlus 7 Pro are lovely, but...

£699 is a huge amount of money.

For the same cost I can buy a halfway decent Asus gaming laptop, a 50" 4k Samsung TV.

Why do they cost so much? Is it the r&d, the short model lifespan, the bill of materials?

If you think £699 is expensive - take a look at Apple - £1449 for the top end phone - more than double the OP7 plus

Squink · 17 Jun 2019 at 11:29

tom_e said:
It is and they will because it's not £699 it's £30-40 a month which suddenly becomes ok.
Most people with top end phones don't buy them outright, if that was the only option then they'd sell no where near the volume they do currently.

It's the way of the world. Mr X can't afford a 20 grand car until that nice man at the dealership tells him the payments are only £275 per month and suddenly Mr X finds himself locked in for 36 months. It's easy to disguise an inflated price by turning it into a monthly payment.

Terminal_Boy · 17 Jun 2019 at 11:35

hyperseven said:
Arent there all sortas of licencing/royalty fees involved?

It depends. All tech companies try to get as much IP as possible to minimise what royalties they pay. There’s a whole bunch of “horse-trading” involved between companies to reach agreements.

Qualcomm is currently in the brown and smelly due to most of their IP being related to CDMA which is almost obsolete now and various phone manufacturers using other chipset suppliers.

Terminal_Boy · 17 Jun 2019 at 11:37

Ixon said:
Apple is one of the main reasons we seen smartphone prices rise dramatically in the past couple of years when the iPhone X launched with the £999 price tag, others followed suite with the pricing of flagships because the none teccy general public would probably think a £600 flagship Samsung was vastly inferior to a £999 iPhone.

If Apple suddenly decided that this years iPhone 11 was priced at let say £700, everybody else would also sell their flagship's under £700.

For Apple to make their usual 35% profit at £700, iPhone 11 would be iPhone 7SE.

Shocky-FM · 17 Jun 2019 at 11:58

So long as people are willing to pay the price, it will continue to increase.

My upper limit for a phone is £600, I'm not going to spend anymore.