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What we pay for a phone

Sarah Putt, Contributor. 12 March 2019, 9:44 am

We're paying more upfront for our smartphones, but we are keeping them for longer. That's according to research from IDC, whose latest report shows that sales of 'low-end' devices declined by 19% year on year in 2018.

"In 2017 the low-end segment accounted for 40% of all shipments, in 2018 this decreased to 32% of the market. The lost share has moved up the value chain and into higher end devices. The mid-range shipments increased by 43% annually, and the Ultra High-End has increased by 24%"

IDC NZ Associate Market Analyst Scott Manion says the reason Kiwis are purchasing more expensive phones is twofold - as we become more dependent on smartphones in our lives we are prepared to pay for better features and we perceive that the pricier devices last longer.

This is a double-edged sword for vendors - on the one hand they get more money upfront, on the other they have to wait longer for the next purchase. According to IDC, the average ownership lifecycle is 3.7 years.

And if you're wondering why no one queues for the latest iPhone any more, it might be because more Kiwis are opting for older models rather than 'flagship' devices.

IDC defines its price bands as follows (excluding tax):

  • Low end ($0 to <$300)
  • Midrange ($300 to <$500)
  • High end ($500 to <$900)
  • Ultra high end ($900+)

In New Zealand we have already exceeded the $2,000 mark for the priciest device available, for example the iPhone XS Max is $2,099, direct from the Apple website. While this might seem an extravagant purchase - despite the long battery light and awesome camera - for those who do upgrade annually, they can recoup some of their investment at sites like Trademe.

Which you might want to do, if Huawei's new foldable phone takes your fancy. Premiered at the Mobile World Congress in Barcelona earlier this month, the Mate X could cost up to double Apple's flagship phone.

That's according to tech commentator Bill Bennett, who attended the event and was able to check it out first hand. He writes that its chief appeal is that it enables users to enjoy the size and function of a tablet, but it can be reduced to a size that fits easily into your pocket or handbag. He notes that for the past few years the latest devices have largely been improvements on existing features (longer battery, better camera etc), but the foldable phone is something new.  

"In your hands it (Mate X) feels almost magical. That's an acid test for exciting innovation."


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