The smartphone market is undergoing a major transformation. Not only did the big players begin to change places, including because of the sanctions against Huawei, but also the market itself began a big redistribution against the background of what is happening now in the world. The worldwide drop in smartphone sales was roughly twenty percent. Against the background of such figures, one can even say that the market died in order to resurrect, when the economy starts to wake up again, and will be reborn into something completely new, which has not happened to it yet. The first signs of what will happen next can be seen now. So it becomes clear which models will rule the show in a couple of years. And at the same time it becomes clear that, perhaps, the manufacturers are right, releasing super-expensive devices.
Inexpensive smartphones are getting better, which is not the case with expensive ones.
Why smartphones are so expensive
Prices in excess of a thousand dollars per smartphone became the norm after the release of iPhone X in 2017. Then all manufacturers realized that it is possible to step over this invisible line and behind it there are also buyers who are ready to sweep everything that is offered to them from the shelves.
This in itself led to the fact that inexpensive models became popular. Even the concept of sub-flags has appeared. So they began to call smartphones, which by old standards seemed expensive, but at the same time not as expensive as new devices.
To a certain extent, this concept has remained even now, and the example of some countries shows very well how such devices are becoming more and more popular. For example, in South Korea, according to the latest sales report, the most popular device was the Samsung Galaxy A90 5G.
The Galaxy A90 5G is the first Galaxy A smartphone based on the Snapdragon 800 series mobile platform. What's more interesting is the price of the device, which is only $ 450. That is, it is more than three times cheaper than the Samsung Galaxy S20 Ultra. At the same time, it cannot be said that the device is as much worse. Even their characteristics can be called similar with a stretch.
The most popular smartphone in South Korea.
How much less people spend on phones
Even if such a comparison does not seem correct to you, how do you figure that the average price of the most popular smartphone this year is almost two times lower than the average price of the most popular smartphone last year. It was the Galaxy Note 9, which sold for $ 806 in Q1 2019.
Compared to the first quarter of 2019, there is a clear increase in demand for affordable premium smartphones. Of the five best-selling Samsung smartphones in Q1 2020 in South Korea, three are in the Galaxy A series, Galaxy A30, A50 and A90. Last year's Galaxy Note 10 5G and Galaxy Note 10 Plus 5G are the only premium flagships to make this list. Interestingly, there are no Galaxy S smartphones on the Q1 2020 list.
This trend is found in other markets as well. For example, according to various estimates, the best-selling smartphone in the world is now iPhone 11 and this is not the most expensive iPhone, although two years before that the top three was headed by iPhone 8 followed by iPhone X, followed by iPhone 8 Plus. That is, the smartphone for a thousand dollars was in second place in the ranking. Now the top iPhone hardly get into the top five sales leaders. Given that Apple has always sold expensive devices well. It should be noted that other manufacturers in the top five are also not represented by flagships.
The statistics are stubborn.
Which smartphone is more profitable to sell to the manufacturer
Sometimes it seems to me that the situation with super-expensive phone models is now more profitable for their manufacturers even against the background of the fact that sales are falling. They used to make good money on these devices because of the high sales. Now the situation has changed a bit.
Technology has become too expensive and attempts to make new smartphones, albeit not much better, require more and more investments. As long as such investments allow you to get at least some benefit, the manufacturer will be, albeit in a small, but positive. This is good, but you have to make money on something. This is where the fun begins.
With cool technology and hardware up their sleeve, a manufacturer can use it all in cheaper models. As a result, they will turn out to be cheaper than those of competitors, and people will also think that if a Samsung Galaxy S20 Ultra for 100,000 rubles is on the showcase, and next to a Samsung Galaxy A51 for 20,000 rubles and OPPO for the same money, then it will buy the first one, realizing that this brand has technology and a reputation. It's like buying Volkswagen or Lada X-Ray for the same amount. The majority choice will be obvious.
Even within the same family, the price can sometimes differ almost several times. Do you understand what I mean?
How manufacturers are driving the sale of cheap smartphones
And the most interesting thing is that with such a horse price tag, manufacturers, willing or not willing themselves, are pushing the user to buy exactly cheaper smartphones, in which much more profit is often sewn up than in the top flagship. So pushing the market is much more profitable than trying to lower the price of a flagship. Whoever buys it will buy it anyway. The main thing is that the price should not be at a loss.
Time will tell whether it is true or not, but one thing is clear for sure. The smartphone market will not be the same in the coming years. Inexpensive smartphones have become too good, and sub-flagships are almost as good as flagships, but they are much cheaper. People will understand that there is life in this category and it is far from a fact that immediately after the end of the pandemic (which is not yet known when it will end) they will run to buy devices for 1000+ dollars. Changes in the market have been brewing for a long time and it is possible that they have come.