According to the future, phones are actually getting cheaper


WhistleOut
29 May 2014

The International Data Corporation (IDC) has released a new report with projected figures for the worldwide phone market spanning from 2014 until 2018. Happily, it confirms what we’ve been hoping since the Nexus 5 and Moto X hit shelves last year: on average, phones are getting cheaper.

The average selling price (ASP) of a smartphone in 2014 is expected to be $314, down from $335 last year in 2013. Should the trend continue, it means an ASP of just $267 by 2018. Confine the data to only include Android devices and it falls even further to $215 in 2018.

Motorola is specifically mentioned in the report as a driver for this global drop in smartphone ASPs. We expect other manufacturers like Huawei, ZTE, Oppo and OnePlus are also responsible for this welcome downward spiral.

Will phones actually be cheaper?

Yes and no. It’s important to remember that these figures are based on the world average sales price. Right now there are plenty of emerging markets where customers are hungry for smartphones, but often unwilling or unable to go much above $200 per unit. India, China, Indonesia and Russia are all countries with fast-growing demands for low-cost smartphones. South American nations are also prime targets, as evidenced by the heavy preference for Android and the proliferation of the ultra-cheap Firefox devices made by Mozilla.

As the number of people with cheaper smartphones grows, the overall ASP of smartphones worldwide is bound to fall.

Unfortunately, when you look at things from this view your Galaxy S9 or iPhone 8 won't necessarily be ludicrously cheap. So long as we have companies with massive market shares you can bet there will always be an expensive device that consumers will flock to.

However…

Smartphone tech is advancing faster than we can figure out new uses for it. Just look at all the bells and whistles crammed in to any of this year’s flagships (heart-rate monitor, depth sensing camera, laser autofocus) and it becomes clear that manufacturers are struggling to justify the power that’s being crammed in to our top-tier phones.

Thanks to that merry band of manufacturers we mentioned before, led by Motorola and Google, the market could start seeing premium devices commonly available for a lot less. By ditching gimmicky features it becomes possible to make a great device for a better price.

The Moto X, Moto G and Google Nexus 5 were great examples of this in 2013. This year we can look forward to the Moto X+1, Moto G 4G, the even-cheaper Moto E, and the astoundingly impressive-looking OnePlus One.

The Huawei Ascend G6 and ZTE 969 are two handsets that may not turn any heads, but are also above and beyond what one would expect from their price range.

Know what you want

What is needed is a little market education for consumers. Right now the buyer’s mindset has been expertly crafted to crave the biggest, latest and most-expensive handsets.

I don’t know about you, but I don’t need a heart rate monitor. A depth sensing camera sounds like a bit of fun, but I doubt I’d use it regularly and laser auto focus? Ok that last one admittedly sounds pretty cool but is it worth the money?

If you really think about it, last year’s phone is almost always better value than this year’s. Compare the Galaxy S4 to the Galaxy S5 on plans and you’ll see a huge difference in price, but hold them side by side and they’re almost identical in form and function, at least for day-to-day stuff.

Once phones can be viewed as commonplace tools instead of status symbols we can clear aside unnecessary expenditure and save a whole lot of money by buying a handset with everything we need and nothing we don’t. Assuming that the cheap smartphone trend continues until 2018.

Source: IDC


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