Are Smart Phones Too Expensive?

Opinion Piece: Are smart phones too expensive? It’s a question that has many layers behind it – but for the top end smart phone costing US$1000 and up, I wanted to look at who was still handing over their own cash to get the latest and greatest.

Having my own preconceived ideas, I decided to run a twitter poll. Note that my audience would mostly be technical workers of some sort:

126 votes towards the poll, and it’s quite clear not many people are interested in non-high end phones (I worded it this way to include mid range and low end phones). There’s almost 3x as many work-provided phones being high end – I expected to see the results lean that way strongly which I’ll get into in a moment. The surprising statistic for me was the amount of people still buying a high end phone themselves.

Over half the people who responded, either through paying extra on a mobile plan or plain outright, spent several hundred dollars or more of their own money. It’s a device they’ll use so frequently that the cost vs usage could be mapped out to a dollar a day or so (excluding carrier costs), which is an easy way to justify an expensive spend.

The cost of the Apple XS / XS Max this year is few hundred US$ more than other high end competitors in the Android space, namely Samsung and Google. Reaching a new height in pricing, will consumers and businesses keep buying them? The options are rather limited:

On the Andriod side, it’s harder to justify a high-end phone when a phone of half the cost will provide a similar experience; but having a reliable, fast and trustworthy phone seems to be more important to people; especially when you’re relying on the device as a part of your work.

On the Apple side however, there’s very limited options. Get an older phone, get a lower end phone like the XR for US $749, or go premium. Apple’s hardware and software reliability might be working against the company a bit now, since getting 3 years out of an iDevice is a fairly reasonable expectation based on history: and maybe this is what people will start doing more so now, rather than getting on every 1 or 2 years. Spreading the $1k cost over a longer time makes more financial  sense, and would actually match up with Apple CEO Tim Cook’s claim of their smartphones costing ‘about $1 a day’.

The options to businesses and consumers are very limited. We’re down to a 2 horse race for Operating System choice, and moving from one platform to the other is a huge hassle. Apple can keep creeping their price and they’ll still do well – price doesn’t seem to be the determining factor, new features in the software and hardware are bigger drivers to get units moving. Android’s a bit of a different beast – is the Pixel designed just to keep the products on offer of a decent quality, to make sure their platform is considered on par with iOS?

Why aren’t many businesses buying very low end Android devices and treating them as disposable assets? Or will we end up in a society where BYOD for mobiles is the norm, staff bring their own devices in and it’s up to them to do whatever they want?

To answer that original question – No, they aren’t too expensive. They’re relatively expensive, but ‘too expensive’ implies that less people are buying them and that’s clearly not the case. I hope we see interesting developments in this space over the next few years, but I’m more expectant of seeing the same we have now – very little innovation at a very high price tag.