Most carriers had previously used the ideology of eligibility of upgrades with the cost of signing a two-year contract. The idea was that if the customer was willing to sign a contract guaranteeing their service for two years, the cell phone carrier would decrease the price of a smartphone for the customer. In 2015 Verizon’s upgrade policy was that if a customer renewed their contract with Verizon, they were eligible to pay a one-time fee of $199 and receive a new, latest model smartphone.
At the beginning of 2017 Verizon eliminated this option and adopted a new idea of financing smartphones and having the customer pay a monthly price for the phone. Many companies soon followed (Pressman).
Unfortunately, with the upgrade plan, went discounted rates for smartphones. Now customers are forced to pay nearly full price for a smartphone. Samsung, one of the largest phone manufacturers in the United States, recently released their Galaxy S9+. This phone is a premium phone with many, if not all, of the newest technology that people could be looking for in a new phone. When buying this phone through Verizon the total cost of the phone comes out to $930. However, if you were to buy the phone through Samsung it would only cost you $840. Verizon, as well as all other carriers that sell this device, has marked up the price of the phone instead of the old norm of discounting a device (Samsung Galaxy S9 and S9+). Cell phone carriers have a huge range of influence when it comes to the smartphone market and seem to push for increases in prices resulting in increased profits for themselves (Cakebread). It should be noted that both Verizon and Samsung offer monthly financing with 0% APR for all purchases.
Between 2012 and 2015 the global smartphone price decreased by 21%. This is a normal trend with technology because usually the technology becomes better and less expensive (Baig).
Trends on the Price of Smartphones
By Tim Healey
Apple iPhone X