Samsung and Apple getting greedy?

[dejanh]

With the release of the Note8 at a cool $1300 CAD + tax (all in price is around $1500 CAD) it seems that Samsung (and soon Apple) are really crossing over into the greedy price category. Now there is no reason at all for Apple to not come in with an even larger premium. I fully expect the iPhone 8 to come in around $1500 before taxes. It's a one-up contest between these two that I feel may end badly. Depends who is left without a chair when the music stops. Phones are becoming priced like the stock market. Maybe the whole world is loosing it

What are everyone's thoughts on this?

 

[lucianus_luciferus]

hell yeah

 

[anon(5719825)]

People will pay the price for quality.

 

[Laura Knotek]

If expensive phones stop selling, then prices will decrease. The OEMs will charge whatever prices the market supports.

 

[Joshua Luther2]

Such is the case with the price of everything in the world. The price continues to go up. And yet people still continue to pay those prices. Who's to blame then?

 

[Tsepz_GP]

Pre 2008 recession, there were $1000 Smartphones such as the Nokia E90, Sony Ericsson Xperia X1, Samsung i780 and HTC TyTN II. They were not exactly $1000 but VERY close to it.

 

[dejanh]

People will pay the price for quality.

I can see that with Apple perhaps, but you're surely not talking about Samsung.

 

[amyf27]

There are certainly cheaper phones out there to fit every budget. I happen though to be a Note hardcore fan and am preordering it this a.m. in the U.S. the retail is $930, but I'm on JumpOnDemand and the lease term is about $730

 

[LeoRex]

Such is the case with the price of everything in the world. The price continues to go up. And yet people still continue to pay those prices. Who's to blame then?

That might be the case, but we're talking a rather significant jump... inflation isn't 10%-20% a year at the moment.

 

[Morty2264]

Yes, I think corporations like Apple and Samsung are getting greedy. They are charging overwhelming prices for their devices because they know fans of their products will purchase them.

I had this discussion over an Android Facebook post as well: there are middle-end and high-end devices that do the same or a similar job as Apple/Samsung, at a fraction of the cost - they just don't have some of the extra bells and whistles that Apple/Samsung have. But in Kant respects, they're totally comparable (battery life, display size and quality, similar specs, etc).

 

[L0n3N1nja]

Even in 2012 the Note was near $800 full retail, and it's got even more bells and whistles and a higher build cost.

As consumers demand more premium hardware and features, phone build costs will rise, and the prices charged to consumers will rise.

 

[dpham00]

That might be the case, but we're talking a rather significant jump... inflation isn't 10%-20% a year at the moment.

BOM for the S7 to S8 was about a 20% jump

 

[Aquila]

Prices went up less than the increase in price of manufacturing, as a percentage, respective. It sucks, but basically they just passed most of their extra costs on to us.

 

[dpham00]

Yes, I think corporations like Apple and Samsung are getting greedy. They are charging overwhelming prices for their devices because they know fans of their products will purchase them.

I had this discussion over an Android Facebook post as well: there are middle-end and high-end devices that do the same or a similar job as Apple/Samsung, at a fraction of the cost - they just don't have some of the extra bells and whistles that Apple/Samsung have. But in Kant respects, they're totally comparable (battery life, display size and quality, similar specs, etc).

Well in the USA only Samsung and Apple are making any significant profit. Everyone else is breaking even,making marginal profit, or losing money.

Right now Samsung and Apple, with their flagships, are throwing out a really premium product. With quick updates, and a large and highly paidwork force,r&d, marketing.


They can't compete with companies that throw together a product using mostly lower salaried engineers pinching corners at every turn.

Neither is wrong. Those who want the best bang for the buck won't be looking at Apple or samsung. But usually at the cost of support and slower updates.

You can buy an alfani suit, perfectly serviceable. But it isn't a premium Armani suit. Neither is wrong, they are meant for different markets.

 

[Morty2264]

Well in the USA only Samsung and Apple are making any significant profit. Everyone else is breaking even,making marginal profit, or losing money.

Right now Samsung and Apple, with their flagships, are throwing out a really premium product. With quick updates, and a large and highly paidwork force,r&d, marketing.


They can't compete with companies that throw together a product using mostly lower salaried engineers pinching corners at every turn.

Neither is wrong. Those who want the best bang for the buck won't be looking at Apple or samsung. But usually at the cost of support and slower updates.

You can buy an alfani suit, perfectly serviceable. But it isn't a premium Armani suit. Neither is wrong, they are meant for different markets.

I agree with you! There is no question that Apple and Samsung make stellar products. And I definitely admit that Samsung has amazing displays and that they have great innovation and drive for advertising. I guess it's also my economizing attitude that makes me really look critically (but again, I get what you are saying with regards to these being premium products) at the prices of phones and of other things I may want but not necessarily need. But you're right: to each their own!

 

[dpham00]

I think that the change started around the note 4...with Samsung transitioning to making a more premium product.

Coincidentally that was also around the time that opo came out, and phones in the mid range tiers started being usable

 

[dejanh]

I'm not sure that I agree with the statement that Samsung is really making products that are premium.

I have an S8+ and while it is a good device physically, as a whole package of software and hardware it is a far cry from premium. The interface is slow, laggy. Memory management on the device is atrocious. (As a side-note, my BlackBerry KeyOne outperforms the S8+ in virtually every productivity task. Sure, the beefy SD 835 may shine with games but that's just not my MO, so I compare the two in the way that matters to me.) Perhaps somebody can enlighten me, and I mean that with all sincerity, what makes Samsung devices premium when compared to the likes of LG G6, U11, flagship Sony devices, etc.? What is Samsung doing that justifies the price point that they are charging, except of course, their marketing machine making people think that Samsung == Premium?

To a slightly lesser degree the same applies to Apple. The key difference is of course that there is only one maker of iOS devices. There is nothing to compare to and comparing Android to iOS is apples to oranges. They're worlds apart in many ways.

I think it really comes down to brand cachet at the end. People know Samsung and Apple and think that they are better than everything else, not because they are, but because marketing has everyone bamboozled.

Oh and, with all due respect, cost of BOM does not mean price of product goes up proportionally. Also, where are some of your getting your BOM cost figures? Are you in the supply chain for Samsung?

 

[dpham00]

I'm not sure that I agree with the statement that Samsung is really making products that are premium.

I have an S8+ and while it is a good device physically, as a whole package of software and hardware it is a far cry from premium. The interface is slow, laggy. Memory management on the device is atrocious. (As a side-note, my BlackBerry KeyOne outperforms the S8+ in virtually every productivity task. Sure, the beefy SD 835 may shine with games but that's just not my MO, so I compare the two in the way that matters to me.) Perhaps somebody can enlighten me, and I mean that with all sincerity, what makes Samsung devices premium when compared to the likes of LG G6, U11, flagship Sony devices, etc.? What is Samsung doing that justifies the price point that they are charging, except of course, their marketing machine making people think that Samsung == Premium?

To a slightly lesser degree the same applies to Apple. The key difference is of course that there is only one maker of iOS devices. There is nothing to compare to and comparing Android to iOS is apples to oranges. They're worlds apart in many ways.

I think it really comes down to brand cachet at the end. People know Samsung and Apple and think that they are better than everything else, not because they are, but because marketing has everyone bamboozled.

Oh and, with all due respect, cost of BOM does not mean price of product goes up proportionally. Also, where are some of your getting your BOM cost figures? Are you in the supply chain for Samsung?

I would consider the lg g6 and u11 in the premium smartphone category as well. I am referring them as premium priced compared to phones like the Axon 7 or honor 8 or OnePlus 5 which are mid-high range bargain phones.


I usually use IHS for BOM. For example dor the s8:

http://news.ihsmarkit.com/press-rel...est-far-compared-previous-versions-ihs-markit

 

[LeoRex]

I just see this as Apple and Samsung duking it out over who makes the fanciest, most expensive phone, but I dunno... seems to be a dangerous game, mostly for Samsung. But I don't see much of a choice.

Samsung seems to devote most of its time trying to compete with Apple. Now, both are the market share leaders so that's an easy get. But Apple has the luxury of a platform monopoly... they are the only game in town so for most iPhone users, if they don't want the new more expensive iPhone, they have to go with the older slightly less expensive iPhone.

Samsung, on the other hand, has a number of OEMs trying to knock them from their perch. And while their Android dominance is still safe, it's not nearly as safe as it used to be. It wasn't too long ago that you had one option and one option only if you wanted to get a really good Android phone... you had to buy one of the top shelf models from a select group of OEMs... Samsung, LG, HTC, etc... Motorola, with the first gen Moto X, signaled a shift. Over the next few years, we began to see more and more mid and low end phones - two classes of phones that were utter vomit for a time - that not only were cheap, but they were damn good phones.

Every year, those lower segments are getting better and better and the performance and quality gap is closing quickly. There are several very affordable phones on the market that while not matching 'flagship' phone, it's close enough to not make a difference... especially when you can get one for everyone in your family for the same price as one of those top shelf phones.

Now, with that in mind, you might think that Samsung would be better served to get the prices for these phones more in line with the best of the rest... but I think that would be a mistake. They don't want to be seen as one of many. To the majority of smartphone consumers, Samsung and Android are interchangeable. They go into the store and pick out the newest one and often just walk by the other phones thinking "Oh, those are the cheap phones". So Samsung is forced to try to keep that perception lead... and that costs money. Like dpham mentions, the S8 costs significantly more expensive to build than the S7 Edge and the S8+ even more. I am fairly certain that the Note 8 is probably going to set a record for BOM price for a mass market phone.

So Samsung needs to chase the dragon's tail... they have to be seen as above and beyond and not just 'one of many'.

Premium product for a premium price. They want consumers to think "Gee, that phone is $1000.. it must be TON better than the $500 phone on the other bench"... And THAT is the dangerous game, because Samsung runs the risk of consumers discovering that the answer to that dilemma is now "No, its not really".

 

[Morty2264]

I just see this as Apple and Samsung duking it out over who makes the fanciest, most expensive phone, but I dunno... seems to be a dangerous game, mostly for Samsung. But I don't see much of a choice.

Samsung seems to devote most of its time trying to compete with Apple. Now, both are the market share leaders so that's an easy get. But Apple has the luxury of a platform monopoly... they are the only game in town so for most iPhone users, if they don't want the new more expensive iPhone, they have to go with the older slightly less expensive iPhone.

Samsung, on the other hand, has a number of OEMs trying to knock them from their perch. And while their Android dominance is still safe, it's not nearly as safe as it used to be. It wasn't too long ago that you had one option and one option only if you wanted to get a really good Android phone... you had to buy one of the top shelf models from a select group of OEMs... Samsung, LG, HTC, etc... Motorola, with the first gen Moto X, signaled a shift. Over the next few years, we began to see more and more mid and low end phones - two classes of phones that were utter vomit for a time - that not only were cheap, but they were damn good phones.

Every year, those lower segments are getting better and better and the performance and quality gap is closing quickly. There are several very affordable phones on the market that while not matching 'flagship' phone, it's close enough to not make a difference... especially when you can get one for everyone in your family for the same price as one of those top shelf phones.

Now, with that in mind, you might think that Samsung would be better served to get the prices for these phones more in line with the best of the rest... but I think that would be a mistake. They don't want to be seen as one of many. To the majority of smartphone consumers, Samsung and Android are interchangeable. They go into the store and pick out the newest one and often just walk by the other phones thinking "Oh, those are the cheap phones". So Samsung is forced to try to keep that perception lead... and that costs money. Like dpham mentions, the S8 costs significantly more expensive to build than the S7 Edge and the S8+ even more. I am fairly certain that the Note 8 is probably going to set a record for BOM price for a mass market phone.

So Samsung needs to chase the dragon's tail... they have to be seen as above and beyond and not just 'one of many'.

Premium product for a premium price. They want consumers to think "Gee, that phone is $1000.. it must be TON better than the $500 phone on the other bench"... And THAT is the dangerous game, because Samsung runs the risk of consumers discovering that the answer to that dilemma is now "No, its not really".

I couldn't agree with you more. A very well-written and informative post.