Apple Inc. (NASDAQ:AAPL) may have started a trend with its $999-plus iPhone X. With Samsung just weeks away from taking the wraps off its new flagship smartphone, leaks suggest that the Galaxy S9 price might be significantly higher than last year’s Galaxy S8.
Consumers are forking over for the iPhone X — albeit in smaller numbers than Apple hoped for — but will they be willing to pay a premium for the Galaxy S9?
Price Leaks Suggest Big Galaxy S9 Price Increase
A number of sources in Korea, the U.K. and Holland claim to have insider information on Samsung’s Galaxy S9 price plans.
And while the numbers being thrown around vary wildly (and include conversion between currencies to make things even more complicated) — anywhere from $775 to over $1,000 — they all point to a big price hike for the Galaxy S9.
Gizmodo is collecting the price reports and warns buyers to “prepare for a ridiculously expensive Galaxy S9.”
TechRadar suggests that when all the numbers are averaged out, exchange rates are accounted for, and past geographical pricing for Samsung launches are taken into account, the U.S. Galaxy S9 price at launch could be $850. That’s about $100 more than last year’s Galaxy S8.
Samsung Emboldened by Apple’s iPhone X Price?
Why would Samsung set the Galaxy S9 price so high? That would make it considerably more expensive than key competitors. Apple’s iPhone 8 –the smartphone the Galaxy S9 arguably will compete with directly– starts at $699. In the Android world, Alphabet Inc’s (NASDAQ:GOOGL) Pixel 2 is a smartphone many potential Galaxy S9 buyers will be looking at, especially if the key Galaxy S9 upgrade this year is its camera, as expected. The Pixel 2 is renowned for its camera performance. But the Pixel 2 starts at $649.
That would make the Galaxy S9 anywhere from $150 to $200 more expensive than two of its closest competitors. That’s despite expectations that the Galaxy S9 is going to look virtually identical to last year’s Galaxy S8. Will spec upgrades and a new camera justify the ultra-premium pricing?
The key factor in all this is Apple’s iPhone X. And in particular, the iPhone X price. Apple set it at $999, a new high bar for consumer smartphone pricing. There were predictions the iPhone X would fall flat, but that hasn’t happened. Apple hasn’t sold as many as it hoped –at least based on the reports of slashed production orders— but it’s sold enough that the company was able to set new iPhone revenue records, with double-digit increases, despite selling fewer iPhones.
That’s because the ASP (average sales price) of an iPhone has increased dramatically thanks to the $999 iPhone X price.
Samsung may be looking at Apple model and the current market and deciding two things. First that the Galaxy S9, with its curved OLED display and minimal bezels actually competes against the iPhone X as much as the iPhone 8. And second, that with a mature smartphone market, ASP is becoming more important than ever.
Both of those factors support boosting that Galaxy S9 price. Even at $850, compared to the iPhone X it is still a bargain. And if Samsung sells fewer Galaxy S9s than Galaxy S8s, it could still see a smartphone revenue boost thanks to the Galaxy S9’s higher ASP.
All of this is conjecture at this point, but where there’s smoke there is often fire. Samsung will be unveiling its new smartphone on February 25, so in just a few weeks we’ll know for certain what that Galaxy S9 price will end up being. But all signs point to higher…
As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.
