Smartphone Competition and Lower COGS Put Pressure on Average Selling Prices

To date smartphone leaders Apple and Samsung which dominate the high-end of the global market for feature-rich devices have has pricing power over suppliers and consumers alike. Now that devices announced at the Mobile World Congress are arriving in stores at roughly four times the price of my current phone, they seem a lot less desirable. An unlocked Samsung Galaxy S7 Edge costs a whopping Rs. 56,000 ($840) in India; in the US, the LG G5 is set to go on sale for about $645 next month. The advantages they offer over significantly cheaper models aren’t exactly negligible, but it’s becoming increasingly difficult to justifiy the difference in cost. Good design, snappy performance and commendable build quality – everything we’ve been used to paying top dollar for – are steadily becoming the norm for smartphones, much to the delight of those of us who have to buy phones off contract and unsubsidized. Friends, family and followers often ask me to recommend the next phone they should buy and of late, I’ve been pointing them towards cheaper devices without having to worry if they’ll find it lacking. That doesn’t mean gadget aficionados shouldn’t buy a flagship anymore – if there’s a phone out there that catches your eye and has you reaching for your wallet, go for it. But just know that if you’re low on cash, there are options out there that are almost as good for a fraction of the price. How will these trends affect both consumer demand and vendor profitability? Share your thoughts here at the Smartphone and Tablet Zone: http://smartphoneandtabletzone.blogspot.com/