Smartphone prices to skyrocket

The world’s largest smartphone maker revealed a record-breaking price for its latest flagship handset this week but Samsung is not alone in raising the price of the phones, with the record price still held by its major rival, Apple.

Some consumers are already backing away of the latest smartphone price war, and experts warn cost hikes is likely to continue, fuelled by greater expectations, more advanced technology, and demands for significant improvements every year.

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At a staggering $1799, Samsung has set a record-breaking price for its new Galaxy Note 9. br /Picture: Getty Images

At a staggering $1799, Samsung has set a record-breaking price for its new Galaxy Note 9.

Picture: Getty ImagesSource:Getty Images

Telsyte managing director Foad Fadaghi said the skyrocketing cost of smartphones became obvious as far back as 2016, when bigger phones were becoming the norm, and high-end handsets were increasingly treated like status symbols.

“We saw smartphone prices rising past the average computer price a couple of years ago and it hasn’t slowed down,” Mr Fadaghi said.

“Consumers have also showed that their appetite for smartphones and their willingness to pay more for them is growing.”

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Buying top model Apple iPhone costs a whopping $580 more than it did four years ago. Picture: AFP

Buying top model Apple iPhone costs a whopping $580 more than it did four years ago. Picture: AFPSource:AFP

Samsung’s top model Galaxy Note has risen by more than $110 every year on average. Picture: AFP

Samsung’s top model Galaxy Note has risen by more than $110 every year on average. Picture: AFPSource:AFP

In the case of the leading smartphone manufacturers, buying a top model Apple iPhone will cost you $580 or 46 per cent more today than it would have in 2014. The iPhone X is currently the most expensive phone in Australia at $1829.

Similarly, Samsung’s top model Galaxy Note has risen by more than $110 every year on average, or 44 per cent, since the launching its Note Edge in 2014.

Samsung Electronics Australia mobile division vice-president Garry McGregor said this year’s price rise reflected the cost of the phone’s new and advanced additions.

The Galaxy Note 9 featured eight times the storage of its 2014 peer, for example, a larger screen, more advanced internet connection, and significantly better cameras.

Mr McGregor said smartphone users demanded better features with every release, and it was up to manufacturers to work out which new technology would have the greatest impact.

“I think that responsibility does lie with us to a certain extent,” he said.

“We talk a lot about meaningful innovation and the integration has to be meaningful. I do believe the focus on phones is going to change from feeds, speeds, and specs to the experience (using them) in future.”

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A survey of more than 2000 Australians, which found just nine per cent were planning to upgrade their smartphones over the next year. Picture: Getty Images

A survey of more than 2000 Australians, which found just nine per cent were planning to upgrade their smartphones over the next year. Picture: Getty ImagesSource:Getty Images

Mr Fadaghi said the rising cost was already having an impact on Australian smartphone buyers, as many were opting to “hold on to their phones for longer so they could recover the cost”.

The trend is backed by a Finder.com.au survey of more than 2000 Australians, which found just nine per cent were planning to upgrade their smartphones over the next year.

The $1800 smartphone price tags were also pushing phone fans towards leasing or paying off devices over 12 or 24 months, Mr Fadaghi said, rather than spending money upfront.

“A lot more customers will, if they’re not already, consider taking out a contract or a repayment plan to help manage the cost,” he said.

“When you get to a high price point, it often makes sense to go on to a contract.”

Many Australian carriers released postpaid plans for the Note 9 yesterday, ahead of its August 24 launch. The cheapest include an $85 a month leasing plan from Optus, and a $112 monthly plan from Telstra offering a 3GB data allowance.

Jennifer Dudley-Nicholson travelled to New York as a guest of Samsung.

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