Smartphone sales have started to get a little sluggish. Google Pixel 3 sales weren’t quite what Google hoped. The average price of smartphones is continuing to climb. If we ignore foldable phones like the Samsung Galaxy Fold or the Huawei Mate X (which can price as high as $2,000) your average smartphone launches for $800 to $1,000. $650 used to be the normal flagship phone price. The Galaxy S7 launched at $669 in 2016, the original Google Pixel phone launched at $650 in late 2016, and the LG G6 launched at $650 in 2017. It was just two years ago that $650 seemed to be the norm, but now things have drastically changed. The Google Pixel 3 launched at $800 in late 2018, which is quite low compared to the Samsung Galaxy S10 which launched at $899, and the Galaxy S10 Plus which launched at $999.
In short: phones are getting more and more expensive. But as phones are getting more and more expensive, slowly but surely people are realizing that they don’t need a $1,000 phone. Flagship sales are not growing like they once were, and with that people are responding.
Do You Remember the iPhone 4 or the HTC Evo 4G?
Do you remember when the iPhone 4 came out? I remember when the iPhone 4 couldn’t even use 4G LTE, and apps could take a minute to load. Some of you remember the HTC EVO 4G, which in my opinion was the first revolutionary Android phone, but that struggled to download more than a few apps at a time.
Times Are Changing
Every year I hear about new Qualcomm Snapdragon processors that are releasing. They typically promise 25% or 50% faster speed than the processor that came the year before, along with some other capabilities. As processors have gotten faster and faster and as they get faster and as phones get faster, expectations change. Just like flagship phones in 2019 are getting faster, mid-range phones are getting faster to.
At some point though, phones can only get so fast. Phones used to take 5 seconds to load an app, but now most mid-range phones and flagship phones all load things in under one second. Now that technology has advanced, it feels like we are just improving loading times by milliseconds.
Installment Plans Also Arrived
In 2016, Sprint was the last carrier to kill off two-year contracts. For a long time, Americans were deceived with how they can buy smartphones. People were completely convinced that they were truly getting “free phones” or a “phone for $50”. In reality: because US carriers were giving out cheap phones at a loss, those same carriers were charging more for service. This was one of the most misleading tactics that all US carriers pulled because people were convinced that high priced cell phone service was “just the way it is”. I worked for Sprint for 4 years, and when 2-year contracts died off, people scoffed that they had to pay for a phone. “Wait, I’ve gotten a free phone every two years for the last fifteen years, what do you mean my phone isn’t free?” This was the normal talk of customers. It took years to adjust.
Prepaid cell phone plans started to become the thing that bargain shoppers did, and not just poor people or the older generation. Cricket started using AT&T towers and Straight Talk became popular for people paying big money. As prepaid competition got stiffer, and as T-Mobile and Sprint started a price war with other competitors, prices began to drop.
It is no accident that two-year contracts died in 2016, and mid-range phones are on the rise in 2019. People began to pay full price for phones, and it was a hard adjustment. Over time people began to understand the true cost of smartphones, and as people began to realize that phones cost $650, people started to look for cheaper alternatives. Some people kept their old phones as ways to save money, and other people started buying cheaper models or used models online.
In the US, Motorola Led the Way
In 2016, things really took off with mid-range smartphones. The Moto G4 was released in 2016, and in early 2017, the Moto G5, G5 Plus were all released. Motorola didn’t stop there, and in late 2017 the Moto G5s and G5s Plus were released. These phones truly changed the game for the mid-range phone market in the US.
As people were trying to “unlock” their options by having “unlocked” phones that could work with any carrier, Motorola started to make phones that work with every carrier. Best Buy and other retail stores began selling phones like the Moto G5. What is great about the Moto G series, is that these phones work with Sprint, Verizon, AT&T, and T-Mobile. That is a rare feat for most phones because Verizon and Sprint use different technology than most of the world (CDMA technology) and different phone bands than many GSM carriers (like AT&T or T-Mobile).
Simply put: Motorola released several good mid-range devices that worked on any carrier for a great price. Finally, people could buy a good phone and use it on a prepaid carrier like Page Plus (using Verizon towers) and then take that same phone to AT&T if they felt like it. Motorola led the way, and others followed.
In the past couple of years, most unlocked phones that Sony sells have gained certification to work on Verizon. Most unlocked Sony phones you can buy at Best Buy will work with Verizon, AT&T, or T-Mobile.
The Pixel 3a Is Proof That You Don’t Need a $1,000 Phone
Why pay $1,000 for a new phone? Phone carriers are smart, and with installment, billing carriers have found new ways to force “contracts” onto their customers and force their customers to stay with them for two years. If you can’t afford a $1,000 smartphone, why don’t you just finance it for 0% interest at $41 a month?
It sounds nice, but is it really? No matter how you slice it, $1,000 is $1,000. If you are an average person in America, you probably struggle with debt. Whether it is college debt or credit card debt, many people in America are living paycheck to paycheck.
The Google Pixel 3 is a fantastic phone, but despite that, sales were very poor. Not many people wanted to spend $800 on a phone. This led to Google releasing the Google Pixel 3a.
For only $400, the Pixel 3a has almost all of the same camera technology from the Google Pixel 3. The Pixel 3a retains a headphone jack, a better battery than the Pixel 3, and it also comes with the newest Android software.
What’s the downside to the Pixel 3a? It has a plastic back, the display is slightly worse than the Pixel 3, the Pixel 3a is not water-resistant, and the Pixel 3a is about 15% slower than the Google Pixel 2. People say it is a “mid-range” processor, but the mid-range processor in the Pixel 3a is very comparable to the processor in the Pixel 2.
There are some slight perks to getting the Pixel 3, but is it worth it? In my opinion, no, it is not.
As flagship phone sales slump over the next few years, expect more companies to follow in the shoes of Motorola and Google and release better mid-range phones. Mid-range phones are the future, and if you can get the phone unlocked (which gives you the ability to choose any carrier anytime) why not? Mid-range phones are the future, get on board!
Feel free to leave any comments below, and if you have any questions, I will be happy to answer them!