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Smartphone Prices Fall

Posted by: Olga Kharif on September 08, 2008

Nowadays, everyone wants a smartphone. Why? The going assumption is that Apple’s iPhone’s has reinvigorated the smartphone market. Everyone wants an iPhone in order to look cool, and to be able to surf the Web and answer e-mails. That’s certainly true.

But there is also another reason why U.S. consumers snapped up 9 million smartphones between January and July — that’s up 84% year over year, according to consultancy NPD Group. Simply put, smartphones are getting cheaper.

The average price of a smartphone declined from $199 a year ago to $185 in the period between January and July, according to NPD. That’s quite a steep drop. And my bet is, the average smartphone price has plummeted further since iPhone 3G’s introduction. Since the new phone is subsidized by AT&T, it sells for $200 and $300, depending on storage offered. That’s half of last year’s price, which had been reflected in NPD’s numbers. Clearly, smartphones are getting a lot more affordable, and that could be a big reason behind their massive uptake.

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Reader Comments


September 9, 2008 02:54 PM

I have been using my iPhone for about a year and price had nothing to do with it. I wanted the features and the ability to connect to the web and e-mail almost anywhere. Though I am sure there are lots of people motivated by price with smart phones I do not believe that is the main motivation for most smart phone buyers. It is all about the features.

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BusinessWeek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, Douglas MacMillan, and Spencer Ante dig behind the headlines to analyze what’s really happening throughout the world of technology. One of the first mainstream media tech blogs, Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.



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