The prices of ultra premier smartphones have been skyrocketing for the past few years. The mid-tier category has seen significant growth.
Amid the Coronavirus pandemic, the demand for non-essential items has plummeted. Consumers are shifting their hard-earned resources to only things that can help them get through these unusual times.
As more and more factories and businesses shut down temporarily during the lockdown, more and more people are also experiencing unemployment. As unemployment grows, the resources of the people get depleted day by day.
This is the domino effect that the Coronavirus is causing societies across the world.
Drastic smartphone price increase
The new reality that overall actual value beats perceived value is drilled further during this pandemic period. A few years back, the prices of flagship phones hovered between $500 to $600.
This was drastically changed by Apple’s introduction of the Apple X back in 2017. It was the first time in the smartphone industry history, where the retail price of a phone surpassed the $1,000 mark.
As a natural occurrence, other phone manufacturers followed suit, thereby giving birth to the middle tier category.
Smartphone users are holding on to their phones longer
There seems to be fatigue in terms of appetite for new smartphones. In a report, it was said that the life cycle intended by the smartphone manufacturers are being beaten by customers.
What was originally designed to be held on for only 20 to 22 months is being extended up to 23 to 27 months by the average phone user.
The report also said that the price increase implemented by the phone manufacturers also prevent customers from upgrading their phones.
With the Coronavirus hitting people’s funds harder, the decision to upgrade smartphones will be pushed back further until the situation normalizes.
Mid-tier phone dominance
The mid-tier phone proves to be a force to be reckoned with as it provides the most actual value compared to regular smartphone users.
For Samsung in 2019, it wasn’t the Galaxy Fold series nor any phone from the Galaxy S series that sold the most. In fact, the Galaxy A series found the highest volume of sales generated for the company’s business.
As for Apple, its best selling phone wasn’t the padded iPhone 11 nor 11s. In fact, the best selling phone for the company was the iPhone XR.
Samsung, Huawei, and Apple’s mantra are to push the envelope further for their premium flagship phones. Unfortunately, as they push this further, the prices of their phones will only go higher.
Luckily for consumers, other companies such as OnePlus have the same mantra, although theirs come with an addition. This addition is to provide the best performing phone with flagship features at a price point between the mid-tier and the flagship category.
Image courtesy of Unsplash/Daniel Romero