How elastic is consumer demand for $1000 smartphones? Right now it might be hard to say.
The NPD Group’s Mobile Phone Tracking service reveals that just under 10 percent of consumers are spending over $1,000 on their smartphones, as prices have been climbing for some time.
Samsung Electronics Co. and Huawei Technologies Co. in fact upped the ante with new models at almost double that cost (foldables were introduced at about $2,000).
Apple kicked off the trend in 2017 with the iPhone X. Its latest premium iPhones, the XS and XS Max, cost as much as $1,450.
Sales of the iPhone 8, in the $800 range, were less robust than many expected. Sales of the iPhone X were less than many expected.
A 2017 survey by Barclays suggested that just 11 percent of its survey respondents would spend more than $1,000 on an iPhone. Most respondents indicated they preferred to spend $582, or $48.50 per month on a 12-month device installment plan.
There are any number of explanations for the apparent low rate at which U.S. consumers are buying phones costing $1,000 or more, which is where many high-lead devices are priced. So what does that mean? Do people not want to spend that much? Are they waiting for 5G? Are they buying lower-priced phones as a deliberate choice?
NPD notes that U.S. consumers in the top 10 markets account for 39 percent of $1,000 (or more expensive) active smartphones, though representing about 29 percent of the U.S. population. Consumers in New York City and Los Angeles are most likely to purchase smartphones at the $1,000 price point.
Like sales of gigabit internet access service, $1000 or $2000 smartphones will likely remain somewhat smaller portions of total phone purchases than mid-level models, even if they drive marketing messaging.
As with internet access, where most customers will not opt to buy the absolute fastest service, but instead buy service that costs less, but still provides the utility required, so most smartphone buyers might opt for mid-range devices.
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