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A year ago, consumer tech blogs were debating the pros and cons of smartphones priced at $1,000 (£778). One commentator opined: “I can’t just shake the feeling that paying $1,000 for a smartphone is crazy” but added: “I … honestly recommend you do it too”.1
Handset vendors appear to believe in the $1,000 price point. Multiple smartphone models currently retail for over £778 in the UK market. Apple, Samsung, Huawei and Google all offer models priced at the equivalent of over $1,000.
Over the last year consumers in the UK and abroad have bought tens of millions of smartphones at these prices. In Q4 2017, the iPhone X, which went on sale in November that year, sold an estimated 29 million units globally, according to Canalys.2 In Q1 2018 the iPhone X, which retails from £999 in the UK, was the bestselling phone in Europe, with 25 per cent share of shipments.3 The iPhone X also led global sales in that quarter, according to Strategy Analytics, with five per cent market share.4
Higher-priced phones have had a material impact on smartphone revenues. In Q4 2017, sales value increased by 24 per cent in the UK, according to GFK, whose figures are based on aggregated point of sales data.5
Higher prices, and strong sales at these price points, have however been balanced by a decline in overall sales units. GfK estimated that the UK market had declined by 11 per cent; Canalys’ assessment was of an even steeper year-on-year fall, of 29.6 per cent.6
The smartphone market in the UK, and in other developed markets, has clearly rebalanced, even if the extent of the year-on-year decline in Q1 was a blip. Fewer smartphones are being sold, but the range of prices now extends to £1,000 and beyond.