$400 Chinese smartphones? Apple and Samsung shrug off cheap rivals, raise prices anyway

With new Chinese flagships entering the US market in the $400 range, you'd think this would spur competition in the rest of the high-end market. You'd be wrong.

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There is serious competition coming from China.

Thanks to competition from Chinese manufacturers, we can all open our wallets and purchase the latest Apple and Samsung flagship for less. Right?

Nope.

Instead, what we see is actually an increase in price of the Apple iPhone 7 Plus and Samsung Galaxy Note 7, compared to last year's releases.

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US consumers today can purchase high-end smartphones from the likes of Huawei, OnePlus, ZTE, Motorola, and Xiaomi for $400 or less. Given the high quality of these phones and low price, one would think Apple and Samsung might adjust prices accordingly. Despite Huawei's third position, and steadily rising worldwide market share, Samsung and Apple seem immune to any price pressure.

Apple iPhone 7 Plus increases $20

The new Apple iPhone 7 Plus (see our hands-on launch coverage) starts at $769 for 32GB, while the 128GB and 256GB models are priced at $869 and $969, respectively. Last year, the iPhone 6s Plus was priced at $749, $849, and $949. So, in 2016, Apple increased the price $20.

There is now double the storage over last year's models, so the price increase isn't unreasonable, taken by itself. However, when you compare it to the fact you can buy an amazing Honor 8 or OnePlus 3 for just $399, you definitely have to think twice before making an iPhone 7 purchase.

Samsung Galaxy Note 7 increases $70

Last year, I purchased the Galaxy Note 5 from T-Mobile for $779. That was quite a deal considering the comparable iPhone 6s Plus was $849.

This year, the Note 7 launched at $849 and is again less expensive than the 128GB iPhone 7 Plus.

One thing to consider with Samsung is that it includes special launch offers such as this year's 256GB microSD card (a $250 value) and the Samsung Gear Fit 2 (a $180 value).

There are many reasons to purchase either one of these new premium flagships, but understand that you will be paying more for one of these than any other phone on the market. Consumers have real choices when it comes to mobile phones today, and while both Samsung and Apple will sell millions of each phone, there is serious competition coming from China, and someday we may see prices drop rather than increase.

Since I write about mobile phones here on ZDNet and spend a few hours a day using my phones, I'm one of those who is purchasing both of these high-end devices.

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