Why are phones getting so expensive? Not greed, just 5G… and crazy periscopes
We don’t need any statistical analyses to tell us that average phone prices are rising again this year, as the trend is unfolding before our very own unbelieving eyes. That $999 price spot we chastised when Apple introduced the iPhone X not long ago, and thought is the user price sensitivity threshold, is long in the rearview mirror.
Phone prices are going up again, but why?
Granted, all these phones comes with the latest chipset, display and camera innovations, and one of the reasons for the ever-rising prices is the ever-rising tide of component costs as well, as per the recent interviews of two large phone makers’ CEOs.
Nobody makes do with a front and a rear camera any more, and some like the P40 Pro are now up to seven sensors in total. Add the expensive periscope zoom with folded lens optics, the high refresh rate displays, and the ultrafast charging, and phones cost way more to assemble now than they did just two years ago.
For the next two years, the camera is very important, but after those two years we won’t stop. But I think it’s not just the camera but also the more time the consumer spends with the phone, they need longer battery life, larger screens and more protection for your eyes. But if you have a larger screen and you want to fit it in your pocket and your hand, then you need a foldable phone or VR…
The cost in that category is very high; we are losing money. The costs are so intensive, you cannot believe it, you cannot make a profit. But the market demand [for the Mate Xs] is huge. We are continuing to increase our manufacturing to increase the volume of shipments.
Prices across the supply chain, from raw materials to 5G chips, are all rising…
Fitting all this in a phone with decent size and weight “very challenging in terms of design and configuration,” according to Mr Laualso said, and he continues with the telling “prices across the supply chain, from raw materials to 5G chips, are all rising generally in the industry.”
When will this upward trend of high-end phone pricing and feature competition come to an end? Well, Pete Lau estimates that, after the initial brouhaha around 5G passes, and manufacturers have managed to master the multi-lens and multi-antenna designs, the costs will come down.
“The price of 4G devices went down somewhat over time … we anticipate a similar trend with 5G,” Mr Lau says, and we can’t wait for that moment to come, given that we are well on our way to the $1500 phone at the top end.