Huawei P20 Pro to Apple iPhone X: The price of premium smartphones is rising and easily crossing 00 mark in many cases. (Image source: Reuters)
When Huawei, the world’s third largest smartphone company, launched its latest P20 flagship at the Grand Palais des Champs-Élysées in Paris, there was a small surprise.That was the P20 Pro, a premium smartphone with not two but three cameras on the back and price tag of $1,107.
Huawei’s top-of-the-line flagship isn’t the first smartphone in the market to cross the $1000 price barrier though. Apple, Samsung and HMD Global, the company that now makes Nokia-branded phones, are all the members of the nearly $1000 or more than $1000 smartphone club. Smartphones have never been cheap, but this is the first time we’re seeing the rise of ultra high-end devices from the mainstream brands. Samsung’s Galaxy Note 8, a premium smartphone with a stylus support and a bezel-less screen, costs $930. At Eur 749 (or approx $922), Nokia 8 Sirocco is HMD Global’s most expensive smartphone in its portfolio.
iPhone X success shows the demand for ultra high-end smartphones
Take the case of the iPhone X, Apple’s most expensive smartphone to date. Announced in September last year, the base model starts at $999 and goes up to $1,149. A brand like Apple has been known for launching its products at the top-end of the market. Its iMac Pro, a desktop computer for professionals, starts at $4,999 and goes up to over $13,000. But this is the first time Apple has come up with an iPhone at a starting price of $1000. For that price, users are getting an edge-to-edge OLED screen and a new biometric solution called Face ID that scans a user’s face to unlock the phone.
Huawei P20 Pro at the launch event in Paris. (Image source: Reuters)
Although initially analysts were skeptical whether the iPhone X would be a success, Apple proved them wrong. During its fiscal first-quarter earnings, Apple CEO Tim Cook said that the iPhone X has “surpassed our expectations” and has been the “top selling iPhone” every week since it shipped in November. Apple hasn’t revealed how many units of the iPhone X it sold in the fourth quarter of 2017, but Singapore-based research firm Canalys estimates the company might have shipped over 29 million units.
Also read: Huawei P20 Pro launch in India soon, confirms company; date not revealed
“The average price of a smartphone is going up because consumers are now willing to pay for a quality product with high specifications and great build,” Navkendar Singh, Associate Research Director- Devices – India & South Asia, IDC India, told indianexpress.com over an email. “Consumers do not mind stretching their budget slightly more than their planned spends since smartphone is no longer a mere utilitarian communication device. And with new better technologies coming in smartphones every few months, need to upgrade to a better phone is driving the higher spends.”
Apple, Huawei building an image of a luxury brand
A brand like Apple, which is often compared to LVMH Moët Hennessy – Louis Vuitton, the French luxury giant, wants to create tech products that cater to well-to-do-people. The iPhone X starts at $1000 in the US (Rs 95,390 in India for the 64GB variant), significantly more than the price of the Vivo V9 which costs Rs 22,990. For an average consumer in India, the iPhone X’s Rs 95,390 price is out of the reach. Hence, the iPhone X becomes a “luxury” smartphone in the market.
The iPhone X starts at $1000 in the US (Rs 95,390 in India for the 64GB variant).
Apple has always positioned its brand as a designer label, something no other tech company has managed to do. And in emerging markets like India and China, the strategy is to sell products at higher prices and build the image of a luxury brand. According to market data from Counterpoint Research, Apple accounted for 47 per cent of all smartphones priced above Rs 30,000 (or approx $460). The report said that the iPhone X was “the leading model in the premium segment”, followed by the OnePlus 5T and Galaxy Note 8. The fact is that Apple iPhone X was received so well that Indian consumers were more than willing to pay a premium for a smartphone.
Taking a page out of Apple’s book, Chinese tech behemoth Huawei is slowly and gradually creating an image of a luxury tech company. To launch the latest P20, P20 Pro and Porsche Design Mate RS, it held an event in Paris – the fashion capital of the world. It has created P-series of smartphones for those who idolise cult luxury brands like Cartier and Hermès and that’s reflected in the prices of the phones.
Read more: Huawei P20 Pro vs iPhone X vs Galaxy S9 Plus vs Pixel 2 XL: A comparison
The P20 Pro, for that matter, costs Eur 899 ( approx Rs 72,212 , $1,108). Not only does the P20 Pro looks premium (the Twilight colour option, in particular), the smartphone boasts a pair of three Leica cameras on the back, including a 40MP RGB sensor. The Porsche Edition Mate RS meanwhile, will retail for €1,695 (or approx Rs 1,36,164) and €2,095 (or approx Rs 1,68,297) depending on storage capacity. It is the world’s first smartphone with 512GB internal storage and even comes with an in-display fingerprint scanner.
“Huawei is the clear leader in China market for past few years, but still seen as a great value for money brand with low and mid-range devices. With the launch of a smartphone at $1000, Huawei’s intent is clear that it wants to be seen as a premium quality brand at premium prices. Also, by entering this category, Huawei wants to join the premium club joining Apple and Samsung, at the super premium end of the market,” says Navkendar.
Navkendar said that Huawei’s long-term strategy will be to emerge as a premium global smartphone maker with capability of “innovation” and “design”. But the results of these efforts in the premium space will be visible in a few years from now.
“A smartphone launch at these prices requires showcasing real innovation (AI) and design capabilities (processor, camera, material etc) , which any other brand (apart from Samsung, Apple and Huawei) currently do not possess entirely. Also, with Huawei’s standing in the global smartphone market at No. 3, it is best suited currently to challenge Samsung and Apple,” he said.