Apple have recently announced the iPhone X – with a staggering £1,000 price tag. For many of us, the thought of living without a smartphone is unthinkable. Now however, it appears that a new era has been ushered in with the launch of the latest iPhone – the £1,000 smartphone. Could this now become the industry norm? Will it have a domino effect on the rest of the market? There are a few areas worth considering in this respect.
Smartphones actually date back to 1999, when Japanese firm NTT DoCoMo achieved domestic dominance. Smartphones have really come to the fore in the past few years, since early 2010 they have become ingrained in society. The iPhone launches have consistently attracted considerable interest. Yet there are a range of other brands – with the Android operating system (Sony, Samsung etc) proving more popular overall. Yet the iPhone has consistently been seen as the benchmark. Technological advancements have facilitated a marked rise in the adoption of smartphones.
But this now is the first time that a smartphone has pushed over the £1,000 mark. The iPhone X is without a doubt the flagship phone in the iOS. The Samsung Galaxy and Sony Xperia Premium offer a strong alternative on the Android operating system. However even these phones currently retail at nowhere near the £1,000 mark. Yet there could be a domino effect. Perhaps now these models will raise their prices. This could easily happen, in fact it parallels with a recent case in the world of sport.
French football club Paris Saint Germain recently acquired Brazilian footballer Neymar for £200m – a world record transfer fee. This was a shock to the world of football – this amount DOUBLED the previous record, set just a year earlier. So, like the iPhone, this was an example of a considerable increase in the price of a good in the market. This transfer had a knock-on effect in football – with other transfer fees rising, with players attracting much higher transfer fees. Around a decade ago – £30,000,000 was a ball-park figure to get a world-class striker. Yet now, £30,000,000 secures very little for any club. This example offers weight to the idea there could now be a knock-on effect in the market.
However the opposing side of the argument would suggest this could be a one-off. Apple iPhone’s are already well-renowned for their cost. Perhaps users will be put-off by this large increase. It is also worth noting that there are several cheaper smartphones being offered by Chinese manufacturers. As these phones don’t carry a brand name, they manage to save on costs significantly – while doing many of the same things that branded smartphones manage. It is expected that these Chinese models will enter the foreign market soon, and disrupt the Apple/Android equilibrium. As there are cheaper models available, this could have an added effect on Android creators to not raise their prices too high, and remain competitive.
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Without doubt, Apple’s iPhone X announcement has led to considerable excitement. The phone will be available in November 2017, with fans already anticipating the launch. But as seen in the world of football, this announcement has the potential to change the market forever. It will be interesting to see how Android phones respond. With Chinese models expected to become a force in years to come, it will be interesting to see if the £1,000 smartphone era will become the industry norm. Only time will tell.