The shift from subsidy models to equipment installment plans (EIP) was a rocky one for consumers (at least in terms of public perception of high-priced phones).
Leading up to the change in 2015, you could walk into a mobile carrier and lock yourself into a two-year service contract. And with that contract, you could get the latest-and-greatest smartphone for something like $200.
Now, you’re expected to pay the full price of your smartphone either upfront or over the course of an installment plan. Suddenly, we’re responsible for paying potentially $1,000+ for a smartphone every couple of years.
The narrative of high-priced smartphones continues to evolve. But one thing is certain—it’s more important than ever to offset device purchases with trade-ins.
Smartphone Prices Are Only Getting Higher
Most consumer tech products have followed a similar narrative. New innovations come to the market at a high price for early adopters. And then, as demand increases and development becomes easier, prices start to come down as the product goes mainstream.
The smartphone market seemed like it was following that trend. But not anymore.
Reports are showing that the 2019 Samsung Galaxy S10 is expected to cost $2,000. That’s a new frontier for the smartphone market, which has led us to expect flagship devices like iPhone X and Google Pixel 2 to cost over $1,000.
Market research from GfK shows that we can expect the rising prices to continue. While the year between Q3 2015 and Q2 2016 showed continued decreases in the average cost of smartphones, Q4 2017 showed a 10% increase year-over-year—a record-setting figure for this market.
One reason that smartphone prices keep rising is that they’re becoming increasingly-vital pieces of everyday life. For better or worse, we’re attached to our phones 24/7 and consumers are willing to pay the price for such important devices.
Another reason is that smartphone manufacturers continue to up the ante on device innovation. The $2,000 Galaxy device could be the first foldable flagship phone and drive even more demand to the release.
The average consumer keeps a smartphone for just about 3 years. So, whether you’re getting ready to upgrade to the latest iPhones or waiting for that 2019 wave of Galaxy devices, you need to be prepared for high prices. Let trade-in value help you out.
Supplement Your Smartphone Costs with Trade-ins
It’s time to start treating smartphone purchases the same way we treat automobile leases/purchases.
When we’re ready for a new car, we don’t leave the old one parked in front of the house in case we need it. No, we trade that car into the dealer to offset some of our costs.
Now that smartphones are so expensive and because we no longer have the benefit of subsidized prices, trade-ins need to become a standard aspect of an upgrade. Even if you have a three-year-old iPhone 6S that’s only worth $40, it’s still better to trade it in for some money than to just ignore that return on your investment.
The real difference comes into play when you’re keeping up with the annual releases of new devices. If you have the latest model of an iPhone or Galaxy device and want the next upgrade just a year later, you could get 40% to 50% back on your trade-in.
We like to say that the best time to trade in your device is today because it loses value daily. Whenever you’re ready to get a new device, make sure you’re taking advantage of this opportunity to offset some smartphone costs—especially as prices continue to rise.