Innovation

Carphone Warehouse: ‘no one wants to pay $1,000 for a smartphone’

By Oliver Smith 24 August 2017
Summary

As Samsung launches the $929 Galaxy Note 8, and Apple prepares to launch a $1,000 iPhone.

Yesterday Samsung took the wraps off its Galaxy Note 8 smartphone, with a whopping 6.2in screen and an even bigger price tag of £869, making it one of the most expensive phones ever.

Today Carphone Warehouse announced a shock profit warning, noting that the rising prices of smartphones plus the “more incremental” advances in phones are leading people to simply hold onto their phones for longer.

“Over the last few months we have seen a more challenging UK postpay mobile phone market,” explained CEO Seb James.

James points to the currency fluctuations of Britain’s decision to leave the EU having “meant that handsets have become more expensive whilst technical innovation has been more incremental.”

But it’s not just currency fluctuations which are sending the prices of smartphones soaring.

Samsung's Note 8 costs a whopping $929 or £869.

Pretty pricey

Even in the US Samsung’s new flagship costs an absurd $929, that’s up from last year’s already pricey Note 7 at $850 (before it was recalled).

Likewise this year’s Samsung Galaxy S8 costs $724, up from last year’s S7 which cost $695.

Next month Apple could be about to blow them both out of the water, with its rumoured next-generation iPhone ‘Pro’ (which will be a new device, launched alongside the incrementally updated iPhone 7s and iPhone 7s Plus) expected to sell for more than $1,000.

That’s the price of a round the world plane ticket.

As far as James is concerned, the big question is whether these devices are big enough leaps to prompt people to upgrade, and for now he’s sitting on the fence.

“It is too early to say whether important upcoming handset launches or the natural lifecycle of phones will reverse this trend.”

We know most people ‘need’ a smartphone but, the truth is, most people already have one, and even when your phone is lost, stolen or broken, in the world of $1,000 smartphones sticking to the same model – or even getting a downgrade – can seem adequately attractive.

This year what will you spend your money on? A glamorous holiday? Or a smartphone?