We’ve used our PriceTRAX tracking database to plot flagship smartphone depreciation. The work demonstrates the pricing divide between ultra-premium and entry-level devices, and the role older high-end handsets have in filling the void.  

To try the PriceTRAX database for yourself click HERE

The work also highlights the positive impact of branding on handset retail values.  As a product ages, you expect its retail price to fall.  In the case of smartphones, this decline has been difficult to quantify so we used a large number of historic pricing data points across 105 channels in 37 countries to shed light on the figures.

Smartphones have a retail lifecycle of around two years. By the end of this, most brands have reduced product retail pricing by 34% on average, although there are notable exceptions; such as Samsung’s S1, Apple’s iPhone 4 and the HTC Wildfire, all holding their pricing well for different reasons. The S1 demonstrates the advantage of being early to market.

• As one of the first of the ultra-high-spec “super-phones” it was well positioned to hold its price through the early part of its lifecycle due to fewer competitors.

Apple iPhone prices tend not to become discounted due to a tightly managed product branding strategy which focuses on premium smartphones. As a result, depreciation during the first 18 months of the product lifecycle is substantially less compared to competing smartphone handsets. Instead, their value slides by 25% between 22 and 28 months of age.  Clearly, iPhones have upheld a clear price differential compared to their counterparts.

The HTC Wildfire shows an extraordinarily low depreciation rate. It was introduced to challenge smartphone prices and has proved to be depreciation resistant compared to others.

A crop of second generation smartphones such as the Samsung S2, Nokia N8, LG Optimus and BlackBerry Curve 3 8520 have similar price depreciation rates 12–24 months after their launches. Another influencing factor would be vendor’s handset portfolio refresh rate impacting on the retail value of existing products and this will be the focus of a later study.

PriceTRAX is an online comparison database from Strategy Analytics tracking contract, unsubsidized and pre-paid retail pricing for smartphones, tablets and mobile phones through carrier and retail channels.

To try the PriceTRAX database for yourself click HERE

Steve Entwistle