Smartphone Retail Price Depreciation Lower for Premium Branded Models
A study into handset retail prices over time has found a 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 applied PriceTRAX to shed light on the figures” explained Stephen Entwistle, vice president of Strategy Analytics.
“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” continued Stephen.
“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. However, iPhones have upheld a clear price differential compared to their counterparts” stated Stuart Robinson, Director for the PriceTRAX and SpecTRAX services at Strategy Analytics.
“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. The 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” Stuart concluded.