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Samsung and Apple are finding it increasingly difficult to sell expensive cell phones

Samsung and Apple are finding it increasingly difficult to sell expensive cell phones

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The iPhone XR and the Galaxy S10E cost less than their iconic older brothers.

Angela Lang / CNET

Smart phone manufacturers, led by Samsung and Apple, have been increasing their prices for years. This, however, has generated rejection among consumers. And now there is new data that shows that it is more difficult than ever to compete in the phone range ultrapremium.

Apple and Samsung reported their earnings this week for the quarter that ended in June, which did not convey much optimism about the high-end phone market. In the case of Apple, iPhone sales fell 12 percent over the previous year, and its total net income fell by 13 percent. Analysts believe that the iPhone XR, the company's new economic model, priced at US $ 749, has become more popular than the iPhone XS of $ 999 and the iPhone XS Max of $ 1,099, both also from Apple. At the same time, consumers are delaying their purchase of new phones pending the arrival of the iPhone 11 in September.

Meanwhile, Samsung's total device sales increased by approximately 7 percent, to 24.3 billion won (about US $ 20,000 million), and the company increased its participation advantage in the global smart phone market by two percentage points, at 22 percent, according to Strategy Analytics information. But this increase was mainly due to the more economical devices of the A series from Samsung. Its operating profits on cell phones were 42 percent lower than a year ago, and revenues from Samsung's main line, Galaxy S, with prices starting at US $ 750 for the S10E model, they fell due to the "weak momentum of sales of the Galaxy S10 and a stagnation in demand for premium products," Samsung said.


Reproducing:
Watch this:

iPhone XR vs. iPhone XS: Is it worth saving $ 250?

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If you are one of the people who are responsible for your money, these results should not surprise you. Phone prices have been rising and people choose to change them less frequently. If someone buys a $ 1,000 phone with all the paraphernalia and features imaginable, he tends to keep it for longer than before. In the United States, consumers now change their phones to a new model every three years instead of every two. At the same time, software updates make old phones feel new, hardware designs do not change much from year to year, and more economical devices are beginning to have features that were previously only found in flagship phones. expensive

For many people, an economic telephone is enough and left over.

"Innovation comes more from the side of software than hardware," said Carolina Milanesi, an analyst at Creative Strategies. "The useful life of the device is extended because we get much more out of it."

Cheap phones for victory

The phones may be increasingly expensive, but that does not mean that we are buying them. For Apple and Samsung, the most economical devices on their main lines have become attractive to many people.

CNET's Scott Stein rated the iPhone XR as "the best iPhone for value for money" and said it offers "most of the advantages of an iPhone XS and costs hundreds (of dollars) less." And Jessica Dolcourt of CNET referred to Galaxy S10E as "a dream come true for value shoppers who love small phones."

These two devices, which in both cases are the most economical versions of their flagship telephone lines, are proving to be popular with consumers. Canalys said the iPhone XR constituted the "positive side" of weak iPhone sales in the quarter that ended in June. According to estimates of this research firm, this device represents about 38 percent of Apple's orders in the month of May. And Apple's chief executive, Tim Cook, said the company benefited from changes in store equipment and financing programs.

But it is not only the most economical versions of the main phone lines that have surpassed their expensive older brothers in popularity. In the case of Samsung, it is the company's Galaxy A line that is attracting buyers. As Samsung said, its total smart phone orders increased between the first and second quarter due to "strong sales of the new Galaxy A series, including (models) Galaxy A50 and A70 ".

Many of these devices have features similar to those of Samsung's more expensive phones, and some even have features that are not found on the Galaxy S and Note lines.