Let’s talk about the thing in your pocket, the thing you can’t live without. No, I’m not talking about your car keys, or even your wallet. I’m talking about your phone. By now, it is either already obsolete or quickly becoming so as the next generation of cellular technology is being designed.
While I realize that there are many different brands, for simplicity sake I will assume there are only two: Apple and Samsung. 2017 promises the reveal of both the iPhone 8 and the Galaxy S8. As Samsung continues to innovate and Apple continues to copy Samsung’s last year model, one thing is for certain: the new models will cost you a pretty penny.
In a leak from a Ukrainian retail store, Hryvnia, the Galaxy S8 and S8 Plus will go for $950 and $1050 USD respectively, a near $100 increase over last year’s model. Why the price hike? Because they can. In a similar leak, a new iPhone 8 will cost an “excess of $1000”.
Samsung and Apple hold a near monopoly over the cell phone business. Whatever they say the price is, they know customers will still buy them. In fact, customers will wait outside stores for two days waiting to buy them. With this realization, it makes perfect sense that Samsung and Apple would increase prices to $1000.
There used to be a time when new phones were easier to come by. Even though the Galaxy and iPhone series have always had astoundingly high retail prices (often $700+ retail even for the first generation models), customers rarely ever paid full price for them. Cellular service companies offered the same phone for a fraction of the retail price, as long as a two-year contract was signed. This is no more.
Now, AT&T, Verizon and Sprint, to name a few, are pedaling payment plans. Over the course of 24 months, the customer will be forced to pay full retail at $27 increments each month. Gone are the days of getting innovative products for a fair deal and in are the days of getting slightly-shinier-worse-than-your-current phone for five times what you are comfortable paying.
T-Mobile is to blame for this. The penned “un-carrier” who launched a massive campaign to save their dying company has succeeded in making two-year contracts and good deals a thing of the past, and has forced other carriers to respond. While past contracts included buying a device at a subsidized price (fractions of retail) and slapping on hidden charges afterward to make up for the retail-subsidized price gap, current plans blatantly force you into payment plans to pay retail but also include the same hidden charges to make you pay more.
And as prices continue to rise for the new tech, customers will be forced to either pay more or settle for an old, “outdated” model. In a 2014 study, 49 percent of Americans replaced their cellular device on a yearly basis while the number of Americans who replaced biyearly fell from 40 percent in 2013 to 16 percent in 2014. The majority of the remaining 35 percent only replace their phones when their current one breaks.
Apple and Samsung use this data to their benefit. Whatever they do to their next gen phones, the 49 percent will still buy them while the 35 percent will not. So what is the harm in raising the price? The logic fails in the middle range: the consumer who puts value over anything else.
What then will the 8 and S8 offer for the increased price? While this is mostly rumors and leaks, the iPhone 8 boasts a curved screen, removal of the home button and wireless charging (aka, everything that went well with the Galaxy S7). While not much is known about the upcoming Galaxy S8, the first leak sports a poorly-placed fingerprint scanner on the back, having been moved from the front, on par with what almost every other Android phone has done in the past. Big innovation, I see, coming from Samsung there, akin to Apple’s removal of the headphone jack and selling it as an upgraded model. I just hope Apple removes the charging port next. That would really make me want to ditch my current phone and spend $1000.
David Csordas is a campus correspondent for The Daily Campus. He can be reached via email at firstname.lastname@example.org.