The Apple iPhone 5S and Motorola
Moto X smartphones are both very hotly anticipated devices. A few days
ago we discussed Google’s huge advertising budget for the Moto X in a
bid to fight off competition from the next iPhone. However, it seems as
though the iPhone 5S and Moto X could be the cause of a real price
conflict after Samsung’s Galaxy S4.
The huge half a billion dollar
advertising budget
that Google has planned for the Moto X certainly raised some eyebrows,
particularly as it equates to half of Apple’s entire advertising budget
covering
all of its devices last year. In the same
article we also noted that the Moto X would have to fight off
competition not only from the iPhone, but also from many other upcoming
smartphones such as the Samsung Galaxy Note 3.
Only yesterday we also told how despite concerns about the slowdown of high-end smartphone sales, the iPhone seems to be
countering the trend
according to last quarterly sales estimates. This is very promising for
the upcoming iPhone 5S, so it seems that Google and Motorola could have
a lot to worry about. With the growing heat of competition, it seems
that prices of mid and high-end smartphones could increasingly play a
determining factor in their success, and we are more likely to see
special deals and price reductions.
The
Moto X,
sometimes known as the Motorola X phone, has a lot riding on it. When
it was first rumored it was thought that it would be a top-notch
smartphone. However, later leaked specs have revealed something that is
distinctly more mid-range, although there still seems to be a huge
amount of interest in the phone. Estimations of the price of the Moto X
seem to settle somewhere around the $199 mark. but while we wait for
the Moto X, Samsung is pursuing vigorous pricing of its flagship Galaxy
S4 phone in order to maintain market share.
In some regions the recently released Samsung Galaxy S4 is on sale at
a cheaper price than a basic-level iPhone, despite the fact that the
latest iPhone is already 9 months old and the Galaxy S4 must have cost
more to make. Back in April when the Galaxy S4 first released in Europe
the price was around €695, that’s around $895. However, since that
time the price has lowered to around €550/$700. Therefore it seems that
rather than attempting to gain more profit from its new Galaxy S4 line,
Samsung is instead making “statement about price” according to
Forbes.
As a comparison, the basic 16GB version of the iPhone 5 is priced in
the UK at $529, that’s almost $790, so this means that the much more
recent Galaxy S4 is around $90 less expensive than the lowest-cost
iPhone 5. In the US the price of the Galaxy S4 is $579 contract-free at
T-Mobile or $549 at MetroPCS. Contrast this to the cheapest iPhone 5
from Apple that costs $649 and you’ll get some idea of the relative
costs, highlighted even more by the fact that the iPhone 5 is considered
‘old’ when compared to the Galaxy S4.
It does seem then that Samsung is trying to make a point with the
current pricing of its flagship device just as Apple is ramping up to
launch the iPhone 5S, but of course we shouldn’t forget the widespread
rumors that Apple is also just about to introduce a budget iPhone. All
of this could be impacting Samsung’s current price strategy, and it will
be interesting to see the price points of the
iPhone 5S
and Moto X when they are finally unveiled. Will Apple also have to
look at some aggressive pricing for the iPhone 5S for example?
Samsung looks determined to compete with whatever Apple throws at it
in the way of new iPhones this fall, and we shouldn’t forget that the
Galaxy Note 3 is also expected to release around the same time, with a
September introduction being anticipated. There’s a huge amount of
interest in the
Galaxy Note 3,
so maybe Samsung will stick with a higher pricing level for this
device, relying on the S4 variants to maintain and increase market
share.
What remains to be seen is whether the iPhone 5S has enough to offer
to really take off. Although many consumers are hoping for a big
overhaul, the general consensus of opinion in the tech world is that it
may be only an incremental upgrade. It will certainly be interesting to
see how Samsung and Google fare in the ensuing price war that seems
inevitable against the next iPhone.
Do you think Samsung’s current aggressive pricing strategy will see
off the competition from the Moto X and iPhone 5S? Has the Moto X got a
chance of impacting sales of the next iPhone, considering the money
that Google is prepared to spend on advertising? Maybe you think the
real winner of the price conflicts will be the consumer? Let us know by
sending in your comments.