Ladies and gentlemen, welcome to the smartphone revolution
- 26 August, 2015 21:15
It's been a long time coming, gang, but it's finally here. Yes, oh, yes: The smartphone revolution has officially begun.
Hang on a sec -- let me clarify. By "smartphone revolution," I don't mean that mobile technology is just now maturing or becoming an integral part of our lives. That obviously happened a while ago; we've all been toting around and depending on our devices for years, and the technology is pretty much moving forward incrementally at this point.
Nay, the revolution of which I speak isn't about the technology itself -- but rather the way we pay for the privilege of carrying it. For the first time, particularly in America, smartphones are becoming a consumer's game. Both in purchasing them and using them, the tables have at long last started to turn our way.
Stay with me for a minute, because we've got a fair amount of ground to cover here. The revolution is actually happening on a couple different fronts -- first, with the long overdue and much-deserved death of the two-year carrier contract.
The smartphone revolution, part I: The crumbling of the carrier resistanceYou've heard about this pending doom by now, right? Sprint announced the other day that it's phasing out contracts and the subsidies that accompany them by the end of this year. Verizon made a similar move earlier this month, while T-Mobile killed off its contracts two years ago. Only AT&T is still clinging to the antiquated notion of locking consumers in, and we'll see how much longer that's able to last.
Of course, those of us in the know have been avoiding carrier contracts for a while. Once you realize that a "$200 phone" actually costs $700 to $900 -- and that under most carrier contract plans, you end up paying that full price and then some via the ongoing inflated monthly service charges -- it becomes a no-brainer to simply purchase phones unlocked and then find an inexpensive (and commitment-free) prepaid plan that fits your needs.
The problem is that most people are completely unaware that such options exist. In America, the norm has long been to walk into a carrier store and pick out a new device right then and there. Near-ubiquitous ads touting shiny new flagship phones for "ONLY $200!" are pretty deceptive -- and until your eyes are opened to the actual math behind those numbers, it's easy to be misled.
With contracts finally going the way of the dodo, though, the smartphone-purchasing landscape is starting to look drastically different. Everyone's suddenly realizing, holy crap, that "$200 phone" actually costs $815! Maybe the carrier is offering a way to spread out the cost over monthly payment plans separate from your base service -- in other words, a less shady and deceptive way of doing what they were doing before -- but that big final number is no longer hidden behind tiny and out-of-the-way print.
And while the initial sticker shock may come as, well, a shock to some people, trust me: This is a good thing for consumers. Over the course of two years, you'll almost certainly end up paying less than you would have on those old bloated contract plans, even with the misleading smoke and mirrors of a lower upfront cost that accompanied them. And that's not even considering if you take the time to find an inexpensive prepaid plan, like the ones I mentioned before -- which are still widely available and still generally provide better deals than what the carriers themselves will give you.
But that's only part one of the revolution.
The smartphone revolution, part II: The battle of new phone costThe other and equally important part is the price of the phones themselves -- and this is where things really start to get interesting.
We've been seeing an explosion of surprisingly decent affordable Android phones for a while now. Most of them have been budget-level to midrange devices, but even so, many provide admirable overall experiences -- like Motorola's new Moto G, which costs $180 to $220 and is honest-to-Goog more than enough muscle for the majority of smartphone users.
But the price drops are no longer stopping at that midrange level. Motorola is now also about to offer its new 2015 flagship Moto X phone for a mere $400. That's $400, unlocked and off-contract, for a beautifully designed and premium phone that promises to be one of the best all-around devices of the year.
That, my friends, is unheard of. And here's what's especially fascinating: That move -- along with the proliferation of the lower-end-but-still-perfectly-decent super-cheap smartphones -- is changing the way we think about mobile device pricing.
A year ago, the conversation surrounding Motorola's 2014 Moto X -- which itself was a bargain at the time, at $500 unlocked -- was that the phone was a particularly good deal. It was unusually inexpensive relative to the then-widely-accepted flagship phone norm.
This year, the conversation is taking a very different shape. It's something I've been noticing as I've worked on my review of Samsung's Galaxy Note 5 and tuned in closely to the public reaction to that device. The new Note is priced in the mid-$700-range (with slight fluctuations depending on where you buy it), which is not at all unusual for a flagship phone; in fact, last year's Note 4 was priced even higher, in the mid-$800-range off-contract, when it first came out.
But -- can you see where this is going? -- two things have changed:
- People are more aware of the actual price of phones, thanks to the phasing out of carrier contracts and subsidies.
- Along with that awareness, people are seeing that some Android phones are available for significantly less -- both in the budget-to-midrange realm, where you can get "good enough" for a couple hundred bucks, and in the flagship realm, where you can get a major manufacturer's top-of-the-line offering for $400.
Call it commoditization or call it whatever you want, but the times are definitely a-changin'. And while Samsung still has a firm leg up over Motorola with its huge marketing budget, brand name recognition, and carrier store placement, sooner or later, "normal" smartphone shoppers are gonna start picking up on what we enthusiasts already see.
At some point, another major manufacturer will feel the pressure. Another major manufacturer will start trying to compete with Motorola at those lower off-contract prices. And then the ball will really be rolling. Little by little, over time, the base cost of buying a smartphone is going to plummet -- and eventually, resistance will become futile. It's practically inevitable.
After all, if Motorola manages to deliver on its promise of an excellent camera and superb stamina in the new Moto X (and after seeing what the company managed to do with the lower-end Moto G, I'm optimistic it can), the perception of being "expensive" starts to be a real problem for Samsung. Sure, a lot of people have grown to like Samsung's smartphones -- and the devices certainly have plenty of compelling qualities -- but for most shoppers, is there anything about them that makes them worth an extra $350 over Motorola's equivalent? (To say nothing of being worth an extra $500-and-change over the extremely low-cost alternatives.) We're talking nearly double the price from one flagship to another.
Apple might be able to pull off that kind of "premium pricing" approach, as people really do buy into that brand and the connotations it carries. But Samsung? I'm not sure Samsung is at that same level of allegiance. Not when we're talking a difference of hundreds of dollars -- a difference shoppers are about to see more clearly than ever.
(I'm using the new Note as an example, by the way, since that's where I started to notice this "expensive" discussion beginning. Samsung's smaller Galaxy S6 isn't much cheaper, though: That phone is in the mid-$600-range off-contract. And it's not just Samsung, either: Current flagships from HTC and LG are also in that same general range. This is very much an industry-wide phenomenon.)
Now, don't expect any sort of drastic changes to happen overnight. Like most things, it's going to take time for the effects of this to spread throughout the industry and start making a difference. But just like with the carrier contracts three years ago, a rumbling is rising down under. Expectations are evolving. The writing is on the wall.
The smartphone revolution is upon us, my comrades. And for us as consumers, that's nothing but good news.
After years of oppression, the ball is finally in our court.