If you’re in the market for a new phone, get ready for sticker shock. Don’t be surprised if the Smartphone you want costs as much or more than your last laptop. But it’s just a phone, so why is an electronic device that fits in a pocket more expensive than a laptop?
Smartphones are more expensive than laptops because they are made with exotic materials; their components need to be ultra-small with the latest chipsets, constant technology, display, and camera innovations. Developing and manufacturing the components are costly; an iPhone 12 with 128GB costs almost $415 in materials. The manufacturers also have to either sell more phones or sell more expensive phones to make their margins.
Laptops aren’t going to disappear any time soon, as it’s still easier to do some things on a computer than on a small screen. Still, our Smartphones can do so much that some people rely on them for all their computing needs. Let’s find out why the phones we can carry in our hands or pockets cost so much.
Phones Are More Difficult To Make
Our smartphones are complicated devices. Performance, camera, battery life, and screen size are a few features consumers look for in these devices. Packing the components of a smartphone into a package that fits in your hand isn’t an easy task.
Here are the Components of a Smartphone:
- Displays. Most smartphones use specialized glass products developed by Corning, like Gorilla Glass or the iPhone 12 has a new glass-ceramic called Ceramic Shield. The display under the glass is either LCD or LED. LCDs use up more battery, but LED lights are more expensive.
- Batteries. Unless your smartphone is out of date, you have either a Lithium-Ion or LiPo battery in your device. Li-Ion batteries last longer than LiPos, but they need a protection circuit to control voltage. This circuit makes the batteries more expensive. LiPo weighs less, can come in different shapes, and have a low discharge level. However, they have a shorter life span than Ion batteries and shouldn’t be removed by consumers.
- Chip. The chip in a smartphone or SoC (System on a chip) is the central hub that runs practically everything: the modem, display processor, the phone’s Central Processing Unit (CPU), and its Graphics Processing Unit (GPU). Chips like the Apple A14 Bionic, Samsung’s Snapdragon 888, Exynos 1080, and Huawei’s Kirin 9000 are the top chips today but soon to be surpassed. Consumers demand more from smartphones without them growing larger, so manufacturers continue to develop chips that can do more without becoming larger. The research and development for this don’t come cheap.
- Memory and Storage. The apps you download on your phone need room to work. A smartphone needs internal storage for the apps and RAM as temporary storage so that you can have multiple apps open simultaneously. Producing devices with more RAM is expensive, so the most costly phones will often have the latest RAM technology.
- Cameras. Smartphones have multiple cameras nowadays. The iPhone 12 Pro has three cameras and Lidar. The iPhone 12 Pro Max has a telephoto lens with 5x optical zoom. Some smartphones have one on the back and one on the front for selfies. Manufacturers of camera sensors continue to work on improving the sensors that detect light.
- Modems. From 1G to 5g, Smartphones would not be what they are without Cellular Modems. These components allow the smartphone to communicate with other phones and devices via cellular networks; without them, you have a camera and a device to play solitaire.
- Sensors. Smartphone Sensors are integral to your user experience with the device. A smartphone needs a digital compass for navigation, a gyroscope, and an accelerometer to detect the phone’s orientation. A light sensor adjusts your phone’s screen brightness automatically and a sensor that locks the screen when you take a call and bring the phone to your ears.
What This Means for Smartphone Pricing
Designing components that’ll work properly and fit into a smartphone requires continued research and development costs in addition to the costs of manufacturing the phones.
Add up all the components, materials, and labor, and you have a phone with a hefty price. The insides of a 2018 iPhone XS Max, even back then alone, were $443. Assembly costs, shipping, and sales and support people add to that. Apple still makes a hefty profit, of course. At the time, Apple was selling the device for $1,249.
However, for $250, you can purchase a Chromebook. Why? One reason is that laptops have more room, so they don’t have the research costs needed to create chips that can do more without increasing in size. Expanding the capability in a laptop isn’t nearly as complicated as a smartphone.
Cooling the device is an excellent example. Keeping a laptop cooled is much easier than cooling a cellphone with little room for a fan.
Laptops can use modular parts to save money too. A manufacturer has more choices for motherboards, processors, and the other components of the machines. However, the chip in a smartphone has its functions hardwired—you cannot simply change the CPU. Being able to mix and match components allows a manufacturer to control prices better.
Smartphones Are Nearly as Powerful as Computers
A decade ago, along with texting and calling someone, you could take pictures, surf the web, check your Facebook, and play Solitaire. Flash forward ten years, and what can you do with a phone now?
The answer: almost anything you can do with a laptop and more. You can still use your laptop to check your Facebook and Twitter and do many computer activities that are better and more efficient and ergonomically beneficial with a larger keyboard and screen.
Here are some surprising things you can do with a smartphone that you cannot do with a laptop:
- Watch YouTube videos on your TV. Instead of squinting at a smaller screen, use the cast feature, and the video will play on your tv. If you don’t have an Apple TV it is still possible to mirror your iPhone to a TV.
- Level a picture. You can get an app for either iPhone or Android that keeps you from hunting the bubble level you bought two years ago and is now hidden somewhere in the garage.
- Use as a Breathalyzer. Connect your phone to a BACtrack Breathalyzer to test your blood alcohol level. Then, you can decide whether to drive or call for an Uber.
- Monitor your heart rate. If you want to check your heart rate while exercising, download Azumio’s heart rate monitor (also available on Google play). Advanced features, such as measuring stress levels or sending results to your doctor, are available.
- Start your car. Have you ever lost your car? The Viper SmartStart will find it. On a cold day, warm your car before you go outside.
Add to these the features that only smartphones can do, and you hold a powerful computer in your hand.
Cell Phone Carriers No Longer Hide Smartphone Purchase Costs
When a manufacturer’s best phone costs $250, the monthly contract didn’t focus on the phone’s price. Consumers didn’t complain much about the extra $20 to $25 a month because they owned the phone outright at the end of the contract. They might not have even thought about the final cost of the phone.
Cell phone providers now list costs for smartphone purchases separate from the plans, so the price is no longer hidden in the bill. An iPhone that costs $800 can be bought on 24-month plans under $40.
Manufacturers also need to increase the price of phones because they’re selling fewer phones. More people own a smartphone, and consumers hold on to their phones longer. Some like their phones, and others are trying to put off buying a phone due to the higher prices.
To make money, manufacturers can no longer depend on sales volumes to turn a profit. So, they sell more expensive phones.
Please see some of our other interesting Smartphone articles like “What Is 8K on a Smartphone’s Camera?” and “Smartphone AI: Who Has Your Facial Recognition and Fingerprint Scans?”
More People Rely on Smartphones To Do More
A common argument for the high price of a smartphone is that people are willing to pay more. Although some people buy their phones to show off what they can afford, the real reason we need our phones to do more is that we rely on them more.
Texting, taking pictures, checking social media, listening to music—everyone uses smartphones for those tasks. But have you used your phone for any of these?
- Comparing prices
- Getting directions
- Banking
- Paying for goods
- Reading an ebook
As we demand more from our phones, their prices will rise. As technology progresses, it may offset those rising costs, and they may get cheaper as well.
Bottom Line
You can buy second-hand or rebuilt smartphones for much less than newer models. As new, more expensive phones are introduced, the price of the older models drops. Or, according to Pew Research, you could become one of the 24% of Americans that don’t own a smartphone.
Roughly a quarter of adults with household incomes below $30,000 a year (24%) say they don’t own a smartphone.
Pew Research Center – Americans with Lower Incomes Have Lower Levels of Technology Adoption
There are smartphones on the market in most anyones price range depending on the manufacturer and model. As described above and if you do your research you can find a Chromebook from $250 down to $69 dollars from Walmart. Smartphones are convenient and helpful for phone calls, internet access, and many basic daily functions but they are not essential to life. Sometimes you just need a phone or a Chromebook.
References:
- The iPhone 12 costs 21% more to build than the iPhone 11 — report | Philip Elmer‑DeWitt
- The Washington Post: The rise of the $1,000 smartphone
- INSIGHTS: Your phone is now more powerful than your PC
- Pew Research Center: 10 facts about smartphones as the iPhone turns 10
- BESTLIFE: 20 Things You Didn’t Know Your Smartphone Could Do