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Samsung kicked off its \u201cGalaxy Unpacked\u201d event in San Francisco on Tuesday with a slick promo video introducing its new folding smartphone, the Galaxy Z Flip. Rebecca Hirst, Samsung\u2019s UK head of marketing, took the stage to tout the phone as being \u201clike nothing you\u2019ve ever experienced before.\u201d<\/p>\n
It all seemed to be going so well as she talked through the phone\u2019s specs and features. Then came the price reveal: $1,380.<\/p>\n
\u201cThat\u2019s kind of a mixed response,\u201d Hirst said to scattered applause.<\/p>\n
It wasn\u2019t even the most expensive smartphone Samsung unveiled that day. The top-of-the-line version of its new flagship, the Samsung Galaxy S20 Ultra, starts at $1,399. If you get a 512 GB version, the price ticks up to $1,599.99.<\/p>\n
The Samsung event highlights the new normal for the smartphone industry. In 2017, Apple shocked the world by charging $999 for the iPhone X. Many outlets questioned whether consumers would ever pay that much for a phone. Now, as Apple and Samsung compete for the high-end market, there are a growing number of smartphones that cost well over $1,000.<\/p>\n
Two of Apple\u2019s newest smartphones, the iPhone 11 Pro and 11 Pro Max, start at $999 and $1099, respectively. The latter can cost as much as $1,449. And you can\u2019t get any of Samsung\u2019s newest phones for less than that once unthinkable price tag of $999.<\/p>\n
Even Motorola is charging $1,500 for a smartphone reboot of its Razr flip phone that comes with a plastic screen, a small battery and a fairly average camera by today\u2019s standards. But that didn\u2019t stop enthusiastic (and maybe nostalgic) customers from lining up. Motorola had to push the new Razr\u2019s launch date because of high demand.<\/p>\n
Contrary to what some may have assumed two years ago, smartphone users appear more than willing to shell out four figures on what may well be considered luxury products.<\/p>\n
\u201cConsumer preference has been going towards going more high-end in general,\u201d Maurice Klaehne, an analyst at Counterpoint Research, told CNN Business.<\/p>\n
Klaehne says the high price points of recent devices are dictated partly by the fact that customers are holding onto their smartphones for months \u2014 or even years \u2014 longer than they used to before upgrading.<\/p>\n
\u201cApple and Samsung, in particular, were seeing the market kind of peak in terms of how many phones are being bought year over year,\u201d he said. \u201cSo they\u2019re looking for ways to maximize their profit.\u201d<\/p>\n
Newer technologies like folding displays and 5G, both of which Samsung is leaning heavily on with its latest lineup, also make it easier to justify charging more \u2014 at least for now, Klaehne said.<\/p>\n
Samsung is counting on its head start in 5G, the next generation mobile technology that allows users to download a movie in seconds, to pull in customers. With the new Galaxy S20 series, the company now has eight 5G-enabled phones on the market. The Galaxy S20+ and S20 Ultra are even equipped with a higher-bandwidth millimeter wave 5G, requiring them to have an extra antenna that drives up the manufacturing cost further. (Apple\u2019s first 5G iPhone isn\u2019t expected to come out until later this year.)<\/p>\n
But as these newer technologies become more common the cost could eventually drop.<\/p>\n
Indeed, as pricey as the Galaxy Z Flip may be, it actually started around 30% cheaper than last year\u2019s $1,980 Galaxy Fold, Samsung\u2019s first foray into folding smartphones that was delayed for months because of defective displays.<\/p>\n<\/p><\/div>\n