Why does your phone cost a bomb?

Radhika Sharma

Ten years ago, the very first iPhone was launched. Priced at $800 (Rs 50,000 plus), it was the most expensive phone for its time too for just 8GB of storage. It categorically defined the “smartphone” segment and has been at the forefront of mobile innovation. But here’s the thing about the smartphone market: Apple and a couple of key players such as Samsung and Google may be cracking the innovation, it’s companies such as Huawei, Oppo, Vivo, Micromax that commoditise it for the public.

When the iPhone first boasted of an app store, multitasking and the best 13MP camera with full HD video, less than 2 years later, just about everyone launched phones with the same specs at astonishingly low prices. So, how companies stay ahead in the race, how are new features to be brought ahead, that my friend, is why the consumer pays a heavy price. R&D is not cheap, and if you thought $800 was the most you could shell out for the best device on the floor, think again.

Your next phone has hit four figures; $1000 (Rs 65,000 approximately) is the new normal for flagship phones and features.

Let’s face it, innovation isn’t cheap at all. For new technologies to be introduced to the market, for a generation to change, for companies to stay on top on re-invention, money is spent in billions. Take the latest iPhone X for example. Its facial recognition recognises a person’s face as it ages and its unique face mapping technology mimics exact facial movements, right down to the muscles to add life to its new animojis. While the actual electronic parts may be calculated in bulk (because most of the technology exists), its application in the real world is carefully handed out to engineers, technology designers, tech evangelists and UX designers, who cost big bucks for their talent. Apple spent a record $10.39 bn in research in 2016, which is its highest annual spent ever. Manufacturing cost increases exponentially too.

A couple of years ago, the game was to make your pictures in daylight better. The game shifted to night pictures and video, then to front cameras for selfies and now the battle for the best portrait mode phone is on. Google’s recent release — the Pixel 2 (or the XL) — has undoubtedly won this game, but did you read the fine price print? It too costs close to $900 (close to Rs 58,000).

The question is: will you, the consumer, be willing to push the limit of your purchasing power and settle for the high sticker price? The humble smartphone has evolved to being more than just a communications device; it has now become the single most powerful machine capable of computing everything you need and more right in the palm of your hand. The question to rather ask ourselves is: Do we need a laptop that costs $1000 or would I rather have a phone which has almost the same computing power? Do I need a 4K television or would I rather watch Netflix on my phone with its 5.6 inch full HDR display?

As the battle among the high-end devices continues, companies will need to invest in newer and flashier purchases. And that bar has just been raised. Are you ready for the new normal?