Tuesday, December 11, 2012

2017 - The Year of Cheaper Smartphones

With cellular phones and data plans increasing in price, it’s no wonder so many consumers are going the pay-as-you-go route rather than signing up with some major carrier. But what about the cost of a no contract/ pre-paid phone? Sometimes these can be just as expensive as purchasing one WITH a contract, especially when you’re looking for a smartphone! A new study done by research firm Informa, shows that by 2017 we will see more affordable smartphones making up the majority of sales as consumers gravitate towards entry-level devices. Adding to that, ‘52 percent of smartphones will be priced below $150, underscoring demand for the devices from the emerging markets.’

Seeing as though popular smartphones like the Samsung Galaxy S3 and iPhone 5 currently start at $200, and others starting closer to $300, the $150 price point seems too good to be true. Most of us consumers don’t think about all the work and materials that go into making a smartphone, but if you consider it, the high cost makes sense. According to another study done by Informa last year, expensive smartphones, priced at $250 or above, made up 83 percent of the market. Clearly, our society isn’t opposed to spending a couple hundred dollars on a phone, especially with high cost data plans, so why the expected decrease in price? Some manufacturers have already been dividing their phones into 2 categories - the higher end phones with all the bells and whistles & the lower end pre-paid/ no contract phones that do the bare minimum.

So, the plan for the market of the future will be increasingly split between high-end smartphones that require heavy subsidies, and lower end devices that cost $150 without a contract. MetroPCS, Sprint Nextel’s Boost Mobile, and Virgin Mobile are some examples of carriers already implementing this plan for pre-paid devices, with Nokia still in the process of adding smartphone features to their low-end models.