Sorry, the Galaxy Fold, Mate X will make your Android and iPhone more expensive in 2019

If you think your phone or Android iPhone is expensive now, wait. Foldable phones like the Galaxy Fold and Huawei Mate Xand compatible 5G, as the Galaxy S10 5G and much more, will soon push phone prices well above the $ 1,000 mark that has become the ceiling of premium phones. All that is about to change.

Samsung's foldable Samsung Galaxy Fold starts at $ 1,980 (about £ 1,500) for the 4G version, a price that Samsung justifies by the fact that its foldable phone is a luxury device that is also a true hybrid phone / tablet. (Samsung has not yet shown the Fold in person, apart from a presentation room behind the glass.) The company has not announced pricing for its 5G products, the Galaxy Fold 5G on sale on April 26, or the Galaxy S10 5G that is expected later this summer.

Meanwhile, Huawei's foldable phone, the Mate X, will cost buyers $ 2,300, or about $ 2,600. This is high for a sapphire and leather-covered phone and unprecedented for a plastic phone. Huawei is also positioning the foldable Mate X in this new category of hybrid devices.

Even the 4G "chocolate bar" phones in 2019 that do not bend and do not have 5G are experiencing price inflation. The Galaxy S10 ($ 900) costs 20% more than the median price of the Galaxy S9 ($ 850). Similarly, the budget Motorola G7 ($ 299) increased by 20% over Moto G6 ($ 249). Even the OnePlus 6T 3.8% higher than OnePlus 6 ($ 529) in four months.

And that's for the starting models. Increase your storage capacity and phones become even more expensive. For example, if you want a iPhone XS ($ 1,000) with a storage capacity of 512 GB, you'll pay 35% more ($ 1,349).

Some conditions are pushing prices up, but this rising cost triumvirate makes most phones extremely expensive in 2019. New technologies and designs such as collapsible displays and 5G speeds are driving up prices on behalf of the company. They are also positioning brands to create an ultra-high-end segment that can make every sale more profitable. This is important in a context where phone sales are slowing down and users are keeping their devices for three years or more.

The fact that people are buying more and more expensive handsets in the top bracket underscores the importance of the cell phone as everything for communication, work, photography and entertainment. And as processing power, camera technology, battery life, and Internet data speeds improve generation after generation, the value users attach to a phone is sure to grow.

"Consumers are willing to pay more for a cellphone because it is arguably the most important product in their lives," said Ben Wood, senior research analyst at CCS Insight.

Data from 13 telephone models from 2016 to 2019 show a strong upward trend in prices, which we expect to intensify in 2019 and beyond (see chart below).

Rising prices are not unusual in themselves. Faster and better components, such as processors and camera multiplication, cost more. The financial burden of researching and developing new materials is also incorporated into the final product.

And inflation also affects the cost of goods apart from technology. But spending on R & D and inflation do not tell the whole story of the insidious spending of your phone.

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Yes, your phone costs more each year

With a few exceptions, the prices of major brand phones are on the rise. The rise is immediately noticeable when comparing the prices of today 's phones to those of the same published model two or, in some cases, three years ago.

Apple's prices have risen at a steady rate for its standard-size iPhone, as well as for the Plus and Max lines, making the iPhone XS Max a spin-off of luxury. Prices for Samsung Galaxy S, S Plus and Note also increase for standard models.

Yes the Galaxy S10E comes at a low $ 750 but the Galaxy S10 and Galaxy S10 Plus are more expensive now that their Galaxy S9 equivalents were a year ago.

Prices of US phones from 2016 to 2019

	2016 (starting price)	2017 (starting price)	2018 (starting price)	2019 (starting price)	Percentage change in the 2016 highest price compared to the current model
Galaxy S10 E	N / A	N / A	N / A	Galaxy S10E: $ 750	N / A
Samsung Galaxy	Galaxy S7: $ 650-695	Galaxy S8: $ 720 – $ 750	Galaxy S9: $ 720 – $ 800	Galaxy S10: $ 900	29.5%
Samsung Galaxy Plus	S7 Edge: $ 750-795	Galaxy S8 Plus: $ 785 – $ 850	Galaxy S9 Plus: $ 840 – $ 930	Galaxy S10 Plus: $ 1,000	25.8%
Samsung Galaxy Note	Note 7: $ 834-880	Note 8: $ 930-960	Note 9: $ 1,000	Expected in August 2019	13.6%
Motorola Moto G	Moto G4: $ 199	Moto G5 Plus (no Moto G5 in the United States): $ 229	Moto G6: $ 249	Moto G7: $ 299	50%
LG G series	LG G5: $ 576-689	LG G6: $ 600-720	LG G7: $ 750-790	LG G8: to be determined	14.7%
LG V series	LG V20: $ 672-829	LG V30: $ 800-912	LG V40: $ 900 – $ 980	LG V50: to be determined	18.2%
iPhone (cheaper)	iPhone 7: $ 649	iPhone 8: $ 699	iPhone XR: $ 749	Scheduled for September 2019	15.4%
iPhone X	N / A	iPhone X: $ 999	iPhone XS: $ 999	Scheduled for September 2019	0%
iPhone Plus / Max	iPhone 7 Plus: $ 769	iPhone 8 Plus: $ 799	iPhone XS Max: $ 1,099	Scheduled for September 2019	42.9%
OnePlus	OnePlus 3: $ 399	OnePlus 5: $ 479 / OnePlus 5T: $ 499	OnePlus 6: 529 USD / OnePlus 6T: 549 USD	Expected June 2019	37.6%
Google Pixel	Pixel: $ 649	Pixel 2: 649 €	Pixel 3: 799 €	Expected in October 2019	23.10%
Google Pixel Plus	Pixel XL: $ 769	Pixel 2 XL: $ 849	Pixel 3 XL: $ 899	Expected in October 2019	16.9%

OnePlus, whose price increases every time a new model arrives, has been escalating steadily. OnePlus is currently on track for two variants a year: the OnePlus 6T launched in October 2018 priced at $ 549 for basic configuration.

the OnePlus 7According to rumors, the price of $ 569 seems to be a negligible increase, especially since it will still cost almost half the price of a $ 1,000 phone. In any case, the cost of ownership is increasing for you.

"As smartphone dependence has grown significantly in a short time, the increase in quality and components required by the industry to meet high performance requirements has also increased," said a representative of OnePlus last August.

According to LG, "Key [pricing] These factors include component cost, competitors' prices, operator incentives, tariffs, and so on. said Ken Hong, senior director of global communications for LG, in an email. In reality, these input costs are increasing, we have to follow suit. "

CNET has contacted all the manufacturers mentioned in this story for comment.

Interestingly, the Pixel 2 and Pixel 2 XL costs the same price as the Pixel and Pixel XL. However, Google raised the Pixel 3 price 23%, without adding a second camera to the rear and make minimal design changes. Google has pushed the price to the height of competition.

But making phones is more expensive now, right?

Phones, like all electronic devices, are made up of parts from different suppliers. If their cost increases, it is certain that the cost of the phones will be too.

The demand for additional storage in recent years has led to higher prices, which has increased memory costs and encouraged suppliers to invest in building new plants to meet demand, according to Wood.

Adding more sophisticated cameras – like the 3D depth-sensing front camera of the iPhone XS – or multiple lenses, like the Galaxy S10 and Huawei Mate 20 ProThree back shooters or the Nokia 9 PureView five rear cameras, also costs more. And materials like folding screensglass or ceramic for the back of a phone, or sturdy aerospace-grade aluminum for the frame.

You can bet that the first phone to debut a diamond glass screen or the new, smudge resistant Gorilla satin vibrating glass will not be cheap. It is also expensive for companies like Samsung to set up a new manufacturing process of items such as Infinity Flex display used on the Galaxy Fold.

Yet while the cost of all these components – called nomenclature – may partly explain why high-end phones cost more every year, many experts say that phone manufacturers are profitable.

"I certainly accept that some of the cost components come from the components and the manufacturing process … but not to that order of magnitude," Wood said.

Carolina Milanesi, an analyst at Creative Strategies, agrees.

"These phones are certainly more numerous than ever before," she said in an email. "The nomenclature certainly increases for these devices, but I think there is a premium margin applied by the brands to their flagship products as they are status symbols."

The effect 5G and foldable

Apple and Samsung have struggled with stagnant sales that have slowed their sales in 2018, but that has not prevented Apple in particular from making big profits.

In August 2018 he became a trillion dollars company, on the back of the high margins of iPhone sales, even as he became the third phone maker behind Huawei. Whether interests continue to cool or increase with 5G and foldable phones is a topic on which industry watchers will remain attentive in 2019.

Nevertheless, the advent of 5G and foldable phone design will likely give phone manufacturers more licenses to cope with costs. 5G phones require entirely new technology inside the device and phones must be custom designed to work with a single operator. This is at least until 5G networks are actually put in place. In the early days of 5G phones, prices could rise by $ 200 or $ 300 by phone, OnePlus told CNET in December 2018.

We are still waiting for the prices of most advertised 5G phones up to now.

"If you generate enough value [in the phone]Consumers will then be willing to pay, "said Justin Denison, senior vice president of Samsung's mobile service, last December, when Samsung first approached its 5G phone.

Even greater costs apply to folding phone models, including the Galaxy Fold, Mate X and a rumble foldable Motorola Razr for $ 1500. These phones will have flexible plastic screens that open in a larger screen, like a tablet, but fold into a device of the same height and width as the current phones (although thicker).

Compared to these $ 1,500 and $ 2,000 devices, a $ 1,000 premium 4G phone seems typical. Yet the exorbitant costs of high-end can still lead to more expensive 4G phones in 2019, which do not have 5G radios or folding screens. Today, with the Galaxy S10, the iPhone XS and the Huawei Mate 20 Pro, other players are right to do the same. Even medium-sized models can increase their prices as long as the devices are relatively cheaper.

For example, the OnePlus 6T at $ 549 still costs almost half of what you pay for the Galaxy S10 Plus and the iPhone XS, a relative value that many find pretty easy to swallow for a "cheaper" phone with high-end components.

According to Wood, the analyst, it all started when Apple announced the iPhone X at $ 1,000. "They have served the entire industry," Wood said. "This gave a little respite to all the other manufacturers and I can imagine that the halls of Samsung, Huawei and others have caused some pleasure."

The raising of the ceiling price has another consequence. Apple and Samsung have both introduced the iPhone XR and the Galaxy S10E as a $ 750 palace cleaner, at the starting prices of the iPhone XS ($ 1,000) and the Galaxy S10 ($ 900) USD). For comparison, $ 750 seems like a good deal. Reducing the cost of entry into an "affordable flagship product" is a way to retain cost-conscious shoppers in the iPhone or Galaxy family.

Mid-range phones are still affordable, but may not be immune

Although foldable phones and 5Gs are pushing buyers' price expectations, this may not mean that the cost of each phone will increase at such high rates.

We continue to witness fierce competition in the middle and low end where phones like Motorola Moto G7 and E5 families produce excellent economic handsets. Yes, prices increase in percentage, as for Moto G6 to G7, but as the overall cost is still correct, about $ 300, the move of Motorola presents a much less radical change than in the high end. Even so, a $ 1,000 "premium phone" could still cost hundreds of dollars less than a state-of-the-art 5G device, or even half the size of a foldable phone.

Among the other brands that portfolio watchers should look for, such as the Huawei Honor brand, Nokia, Xiaomi, Sony, Oppo and Asus, which help bridge the global divide by quietly offering basic and affordable phones to cost-conscious buyers . They manufacture each of the high-end phones as well as medium-priced devices, although not all phones are available in all markets.

Thus, although the most sophisticated and powerful devices are still on the verge of reaching their highest prices, there is still a strong demand for midrange and entry-level phones for people with a reduced budget or more basic needs.

If a $ 1,000 phone seems too outrageous to you, you may have to find beauty in a more modest phone, or overcome the shock of the sticker and accept the fact that a $ 600 flagship phone is already far away. $ 1,000, in fact, becomes the new standard.

Originally published on August 5, 2018 and updated regularly.