Smartphone makers try price creep: Time to revolt

Summary:Don't look now but smartphone prices are starting to creep higher. This strategy is going to be tested amid a weakening economy and an iPhone 5 that may sell at $199.99.

Smartphone makers are pushing prices higher and it's going to be really interesting to watch what consumers do amid a weakening economy.

$299.99 at T-Mobile: Really?!?

Consider the following:

The common thread is that these devices are 4G (or allegedly so). But there are a few realities here to ponder.

Reality 1: 4G is a letdown. My Verizon LTE Mi-Fi can't handle the train and 4G cuts out repeatedly. The problem with that is the hand off to 3G is brutal. As someone who looked forward to 4G, I'm now bordering on disillusioned and frankly would have no problem buying a 3G phone.

Reality 2: $199.99 is the price point that matters. Why? Apple's iPhone is $199.99 in most cases for a 16GB version. I'm not going to spend $249 or more for a phone that has an operating system that will continue to run apps in the background no matter what (Android) and another one that's going to be outdated in a year (BlackBerry OS 7).

Reality 3: These prices fall. Today's premium $249.99 device is tomorrow's $199 buy one get one offer. Call it the early adopter tax.

Toss in the fact that component costs aren't exactly surging and this price increase looks bogus. Some of the prices increases may be justified. The Charge on Verizon packs 32 GB. Then again the latest BlackBerry Bold on Verizon only has 8GB. In either case, consumers may start treating these smartphone vendors like airlines, which try to raise prices and get rebuffed repeatedly.

It may be time for some consumer pushback to this smartphone price creep.

Topics: Hardware, Mobility, Smartphones, Verizon, Wi-Fi

About

Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic. He was most recently Executive Editor of News and Blogs at ZDNet. Prior to that he was executive news editor at eWeek and news editor at Baseline. He also served as the East Coast news editor and finance editor at CN... Full Bio

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