If you think your Android phone or iPhone is expensive now, just wait. Galaxy Fold and and 5G-ready devices, like theand will soon push phone prices well over the $ 1,000 mark that's become the ceiling for premium phones. All that's about to change.
The Samsung's foldable Galaxy Fold starts at $ 1,980 (roughly £ 1,500 or AU $ 2,800) for the 4G version, and the price that Samsung justifies by virtue of its foldable phone being a luxury device that is also a true phone-tablet hybrid. (Samsung has not shown the Fold in person yet, apart from a presentation piece behind glass .) The Galaxy Fold 5G is on sale April 26, or the Galaxy S10 5G, which is expected later this summer.
Meanwhile, Huawei's foldable phone, the Mate X, will cost buyers 2,300 euros, or roughly $ 2,600. That's high for a phone swathed in leather and sapphire crystal, and unprecedented for one made of plastic. Huawei also places the foldable Mate X in this new category of hybrid devices.
Even 4G "candy bar" -shaped phones in 2019 that do not bend and do not have 5G are seeing price inflation. The Galaxy S10 ($ 900) costs 20 percent more than the median price of the Galaxy S9 ($ 850). Likewise, the budget-minded($ 299) rose 20 percent from the ($ 249). Even the crept up 3.8 percent from OnePlus 6 ($ 529) over the course of four months.
And that's for the starting models. Level up your storage capacity and phones become more costly still. For example, if you want a($ 1,000) with 512GB storage capacity, you'll pay 35% more ($ 1,349).
While there are certain conditions of nudging prices higher, this triumvirate of rising costs is making the most expensive phones in 2019. New technologies and designs like foldable screens and 5G speeds are pushing prices higher in the name of advancement, but they are also positioning brands to create an ultra-high-end segment that can make each sale more profitable. That's important in a climate where phone sales are slowing down, and people hold on their devices for three years or more.
The fact that people buy increasingly expensive handsets in the top tier underscores the cell phone's importance as an all-device for communication, work, photography and entertainment. And as processing power, camera technology, battery life and internet data speeds improve generation after generation, the value people attach to a phone is sure to swell.
"Consumers are prepared to pay a premium for a mobile phone because it is arguably the most important product in their lives," said Ben Wood, chief research analyst at CCS Insight.
The data from 13 phone models from 2016 to 2019 show a pattern of sharp price hikes that we expect to heighten in 2019 and beyond (see chart below).
Rising prices are not unusual on their own. Faster, better components like processors and multiplying cameras cost more to make. The financial burden of researching and developing new materials also gets folded into the final product.
And inflation affects the cost of goods outside of tech too. But R & D spending and inflation do not tell the whole story your phone's creeping expense. Galaxy S10 5G and OnePlus 5G phones: 6 things you need to know now
Read :'s rumored $ 569 price tag seems like a negligible bump, especially since it will still cost almost half the price of a $ 1,000 phone. Regardless, the cost of ownership is on the rise.
"As reliance on smartphones has increased drastically over a short amount of time, the increase in quality and components across the industry required to meet high performance demands has also risen," and OnePlus representative said last August.
According to LG, "Key [pricing] factors include cost components, competitive pricing, carrier incentives, tariffs, etc." Ken Hong, LG's senior director of global communications, said in an email. "Fact is, these input costs are rising so we're forced to follow suit."
CNET reached out to all the manufacturers mentioned in this story for comment. Pixel 2 andPixel 2 Pixel 2
But making phones is more expensive now, right?
Phones, like all electronics, are composed of parts that are supplied by various suppliers, and if the cost of those parts goes up, it's a good bet.
Demand for more storage over the past few years has triggered price hikes, pushing the cost of memory and prompting suppliers to invest in building more factories to meet demand, according to Wood.
Adding more sophisticated cameras – like the iPhone XS '3D depth sensing front-facing camera – or more lenses like the Galaxy S10 and' s three rear shooters or five rear cameras, costs more too. And so do materials like glass or ceramic for a phone's backing, or sturdy aerospace-grade aluminum for the frame. You can bet that the first phone to debut a or the new, smudge-resistant will not be cheap. It's also costly for companies like Samsung to build a whole new manufacturing process for elements like the display used on the Galaxy Fold.
While the cost of all these components, called Bill of Materials, or BOM, can partly explain why high-end phones cost more every year, many experts say that phonemakers are padding their profits.
"I certainly accept that some elements of the cost came from the components and the manufacturing process … but not that order of magnitude," Wood said.
Carolina Milanesi, an analyst with Creative Strategies, agrees.
"There is certainly more going into these phones than ever before," she said in an email. "The BOM is certainly growing for these devices, but I think there is a premium margin applied by the brands to their flagship products because they are status symbols."
The 5G and foldable effect
Apple and Samsung struggled with stagnant sales that drove their 2018, but that did not stop Apple in particular from profiting handsomely.
In August 2018, it became aon the back of high iPhone sales margins, even as it slipped into being the third-place phonemaker . Whether interest continues to cool or picks up with 5G and foldable phones is something that industry-watchers keep close eye on in 2019.
Still, the advent of 5G and foldable phone designs will probably give the phone manufacturers more license to support costs. 5G phones require completely new technology inside the device, and the phones have to be tailor-made to work with a single carrier. That's at least until 5G networks really get off the ground. In the early days of 5G phones, prices could rise byOnePlus told CNET in December 2018.
We are still waiting for pricing on most of the 5G phones that have been announced so far.
"If you generate enough value [in the phone]then consumers will be ready to pay," said Justin Denison, Samsung's SVP of mobile, last December when Samsung first talked about its 5G phone.
Even bigger burgeoning costs apply to foldable phone designs, including Galaxy Fold, Mate X and afor $ 1,500. These phones will have bendable plastic screens that open into a larger display like a tablet, but fold into a device around the same height and width as today's phones (though thicker).
In comparison to these $ 1,500 and $ 2,000 devices, a premium 4G phone for $ 1,000 seems typical. Yet mushrooming costs on top-end can still result in more expensive 4G phones in 2019, which do not have 5G radios and foldable displays. With today's Galaxy S10, iPhone XS and Huawei Mate 20 For nudging skyward prices, other players have reason to follow suit. Even midtier models can get away with raising their price tags so long as the devices cost relatively less.
For example, the OnePlus 6T at $ 549 still costs almost half of what you would shell out for the Galaxy S10 Plus and iPhone XS, a relative value that many find easy enough to swallow for a "cheaper" phone with high- end parts.
According to Wood, the analyst, it all started when Apple announced the $ 1,000 iPhone X. "They made the whole industry a favor," Wood said. "That gave all the other manufacturers some breathing space and I can imagine there was a certain delight in the corridors of Samsung and Huawei and others."
Lifting the price ceiling has one other consequence. Apple and Samsung both introduced the iPhone XR and the Galaxy S10E as a $ 750 palate-cleanser to the starting price of the iPhone XS ($ 1,000) and the Galaxy S10 ($ 900). Comparatively, $ 750 seems like a downright deal. Lowering the cost of entry to a "affordable flagship" is a play to keep cost-conscious buyers within the iPhone or Galaxy family, respectively.
Midrange phones are still affordable, but they can not be immune
Although foldable and 5G phones are blowing buyers' price expectations out of the water, that may not mean that the cost of every phone will rise at such sharp rates.
Motorola Moto G7 andfamilies turn out excellent budget handsets. Yes, prices are rising by percentage, as with the Moto G6 to G7, but since the overall cost is still around $ 300, Motorola's move presents a much less drastic shift than the high end. Even at that higher end though, a $ 1,000 "premium phone" might still cost a hundreds less than a cutting-edge 5G device, and possibly half the amount of a foldable phone.
Other brands for wallet-watchers to look for include Huawei's Honor brand, Nokia, Xiaomi, Sony, Oppo and Asus, which help fill the gap worldwide by quietly cranking out basic, affordable phones for cost-sensitive buyers. They each make premium phones as well as midprice devices, although not every phone will be available in every market.
So while the shiniest, most powerful devices are still locked on their way to their highest prices yet, there is still a strong demand for midrange and entry-level phones aimed at people with tighter budgets or more basic needs.
If a $ 1,000 phone sounds too outrageous, you may need to find beauty in a more modest phone, or get over the sticker shock and accept that the days of a $ 600 flagship phone are long behind us. $ 1,000, in fact, is becoming the new normal.
Originally published Aug. 5, 2018 and regularly updated.