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Scott's Column
Cell Phone Prices

October 1, 2017
By Scott Lewis

Recently I have been contemplating the cost of cell phones. Although I will try to remain objective in this article, that will be difficult because I feel phones are too expensive. Other technology gets cheaper and cheaper, even at the high end. Computers, Laptops, TVs, VHS/DVD/Blu-Ray players, Stereos, etc.

I wrote the previous paragraph and this one in preparation for this article. I wanted to get my gut idea out there before I am convinced by any research. I remember technology items getting cheaper. I bought a 46 in plasma TV (Panasonic's second best Plasma display in the 46 inch size) in 2010 for a touch under $900. At that time Pioneer had ended its plasma TVs and Best Buy had put Pioneer's top of the line plasma on sale from $5000 to $2500 for a 55 inch TV. Panasonic and Samsung continued on with plasma TVs due to their better picture quality at the time. Prices inched down year after year. New models would come out initially at higher prices, but you could wait a few months and those prices eventually went down. Less than $900 for a killer flat panel plasma was much less than I paid for my last glass tube TV (about $1,200 for a 25 inch TV). What gives?

What about phones? Time to do a little research (which could influence my opinion, so keep that in mind as we go on).

Before actually researching cell phone prices... an anecdotal story. A friend of mine bought one of the earliest cell phones that was not some crazy giant phone of the 80's (Hi, Rob). I want to think it was a Nokia. I believe (if my memory is any good) that he paid around $1,000 for that phone. There were no contracts back then, and you paid heavily for your minutes. I remember the phone had a small fold up antennae and weighed a LOT. It was incredibly small for the time, so the weight was because it was very dense. This phone fit in your pocket when no previous phone I had ever seen (even in movies) was as small. It was 1989 (again, assuming my memory is right... Rob can always correct me... and likely will).

Given that that Nokia phone was $1,000 in 1989 and the original iPhone was $600 in 2007 (you can see I started the research, here) you would think phones would be a cheap commodity by now. Shortly after my friend paid $1,000 for that phone I bought my first computer. A 386 IBM "Compatible" computer for $3,500... in 1990. No one except some crazy gamer would even think of spending that much money on a computer today. And today's cheap computers blow away the performance of that old 386. My next computer was right around $2,500 (486). Then $2,000 (the point I started building computers), and the computer I built in 2010 was about $1,200 (and is still going, though many components were upgraded... the CPU and motherboard are still from 2010).

Why aren't phones cheaper? I get it that the top of the line phones should be released at a high price. That is how technology works. The new Apple XS starts at $1,000 (and goes up to $1,350). The cheapest "new" iPhone now is going to be $749. Oh sure, you can get an OLD iPhone 6s or 7 for $449. The original price of the 6s was $649. So this phone has only gone down in price $200 in 3 years with NO CHANGES. That doesn't follow any tech trends over the last 20 years. Cell phones got cheaper and cheaper year after year... until the iPhone came out. Now they just keep going up.

I can buy a Blu-Ray player right now with more bells and whistles than the first Blu-Ray player I had for 1/4 the price. Yet I have to pay more and more with every phone release.

This short article from Bureau of Labor Statistics from 2015 tells how tech products have trended cheaper for everything except... cable & satellite TV. Their chart does NOT have phones listed. Oops. But you get the idea.

Checking Best Buy's web site I see the most expensive 55 inch TV (to compare to the 55 inch Pioneer at $5000) is a Sony for $3,500. The next lower priced one is $2,800. These are 4K TVs with HDR and tons of bells and whistles.

I remember when the $1,000 computer was being considered. Those of us that were serious about computers (played games and used serious software like Photoshop) never thought a good computer would be under $1,000. But today I can't recommend someone spend more than $1,000 unless it is for a killer gaming rig or for serious video editing. My son runs Photoshop on his Microsoft Surface.

I have heavily picked on TVs and Computers in this article. At this point what is a phone but a small computer that you can watch videos on.

Where is the $200 iPhone for those that don't want to pay for the top of the line phone? Using Best Buy as an example again, I see a 43" Insignia 4K TV with HDR and Roku built in... for $249. 1/10 the cost of that expensive Sony 55 inch above. If I wanted to get a TV for no more than I paid last time (under $900) I see a Samsung 65" (NU7100 Series) 4K UHD with HDR for... $849! A TV with 4 times the resolution and 70% larger screen. Sign me up for that. I could go cheaper... Samsung 65" NU6900 for $749.

I believe this is largely due to the cell carriers. To make it "affordable" they have the service contract. This enable LOTS of people to get nice phones they would not be able to afford otherwise. I mean really, how many of those people waiting in line for days for that first iPhone in 2007 paid for the phone in full? No one. But once they have you hooked at spending a few dollars each month to cover the cost of the phone, and the phones change every year, those two year contracts kept you coming back for... just a few MORE dollars each month with every time you renew. Before you know it your monthly cell phone bill is more phone payment than service payment.

This has to stop. How? I am so glad you asked. Don't get a new phone. Keep the one you have. In March I switched from Sprint to Verizon. I wanted better coverage, nothing more. I got my iPhone 6S Plus unlocked and took it with me to Verizon. NO MORE CONTRACT... or LEASE... or PAYMENT PLAN. My phone still lasts all day on a charge, sometimes two if I don't use it a lot. My next phone related purchase will likely be a replacement battery some day.

I plan on keeping this phone until something significantly better than an iPhone 6S Plus comes along that is CHEAPER than the original iPhone 6S Plus was. Just like I will do when I by my next TV.

Moore's Law says computers should be twice as fast or 1/2 as expensive every 18 months. The reason phones don't follow this rule is because we don't MAKE IT HAPPEN. Keep your existing phone. It was great when you got it. Enjoy it until it needs replacing. iPad sales are way down because people don't NEED a better iPad than the one they have. Don't fall for the "Keeping up with the Joneses," or FOMO (fear of missing out) that Apple and Samsung are doing to you.

There is a reason why Apple wants you to call XS "Ten-es" and not Excess. Because the truth is that the phone is excess.

Conclusion

Think about it this way... do you have a 4K TV. If not, why? Because you really don't need a 4K TV. So why get an iPhone XS or XS Max. Make a stand.

Now... I think there is a TV calling my name!

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