99-Cent Smartphones: Hot or Not?
It’s that time of year again: the New Radicals have arrived, and the New Kids on the Block are here to boot your parents’ favorite band off the Billboard Top Charts. Actually, come to think of it, the New Radicals are a decade past popularity at this point, and the New Kids are old enough to be your parents’ favorite band, so … maybe forget the flawed analogy. The point is this: the hot new Android devices of 2013 have arrived, in the form of the Samsung Galaxy S 4 and HTC One, and their predecessors are getting the deep-discount treatment as a result. Last year’s hot flagships are this year’s cheap mid-rangers. That’s nothing new, really, but it poses some questions for buyers and sellers of these gadgets, these puzzling devices that Newt Gingrich might call “pocket computers.”
First off, it’s not always easy to find the deals that stray into ridiculous territory. Sure, you can find a Galaxy S III for less than a buck if you visit Sam’s Club on the right day or loiter long enough on SlickDeals, but those prices come with a contract and often confine you to a smaller carrier’s network. There’s also the danger of stacked termination fees if you buy from a third-party outlet, not to mention the hazards associated with trusting any wireless retailer in the first place.
Still, we’re talking significant discounts here. In the fast-paced world of smartphones, a year-old device may be yesterday’s news and unworthy of consideration to we geekier folk – but there’s a whole world of buyers out there. Many of them don’t mind carrying last year’s model if it means saving a bunch of money on the equipment cost up front, even though that’s not what they should be worried about.
One of the problems with bargain-basement pricing is that it can give the impression that a device is sub-par. There’s a whole science associated with assigning prices to products, but it doesn’t take a degree in economics to understand customer behavior: a price point that’s too low will prompt questions of just why it’s such a steal. The category of shoppers mentioned above, though, is savvy enough to understand the technology industry’s ridiculous pace, and they’re willing to play the game.
Apple has played a big part in legitimizing that game due to the popularity of the iPhone, and the company’s consistency in offering last year’s model at reduced costs. As I say, that’s not a new tactic – but because of the simplicity of the iPhone lineup, it is a very visible, easy-to-understand one, and it’s part of the reason so many of my non-technological friends are rocking iPhone 4 and 4S models today. These people know their own needs, they know last year’s smartphone will meet those needs, and they’re happy with the up-front cost savings.
The result is that “cheaping up” last year’s expensive phone works out for everyone: the customer gets (most of) what he or she wants, the manufacturer gets a little more marketshare, and the carrier (since there’s usually a carrier involved) gets either a new customer or a contract renewal out of the deal.
In the long term, a huge factor in whether this works out is support. We talked about this in last week’s article about HTC’s next hurdle; it’s absolutely essential that manufacturers continue to support older devices even as they roll out new ones. This is part of the reason for Apple’s success in moving older iPhones, and in Samsung managing to keep even 2011-era devices like the Galaxy S II relevant today. It’s also why auto dealerships are able to sell so many older cars: in addition to the price break, they often offer service packages to guarantee repairs for a certain time period after purchase.
So deciding whether to drop dough on a discounted smartphone isn’t so much about being paranoid regarding future device releases: as we frequently tell listeners of the Pocketnow Weekly podcast, there will always be something better on the horizon. It’s also not necessarily about being worried you’ll buy a lemon: if a device has survived an entire year on the market, it’s usually not a total train wreck – those usually get canceled within months. No, the most important consideration in determining whether to drop dough on a discounted older device is support.
So when considering saving money by buying yesterday’s news, look to a manufacturer’s reputation for support. Not just in terms of warranty replacement and hardware repair, but in delivering new versions of the operating system and new firmware iterations for bug fixes and security patches. Because in an industry rapidly congealing into a monochrome landscape of apparent sameness, this is one of the main factors setting OEMs apart. And if you’re the type to spend responsibly, you’re probably the type to hold on to a smartphone for a couple years. You’ll want to be absolutely sure that those years will be pleasurable ones.
Title image source: 99only.com