Not everyone rushes out to buy the latest and greatest when it goes on sale. Some of us wait awhile because what’s new becomes old rather quickly these days, and is likely to go on sale again in a month or two, if you know what I mean.
Samsung’s latest Galaxy smartphones start with a premium price tag but get into sale mode within a month or so to help clear out supply to meet anemic demand. Google had similar issues with Pixel 2 and Pixel 3. Premium price tag. Discounted prices a month or two later.
Chris Smith sees that handwriting on Samsung’s walls:
The Galaxy S10 phones may be expensive, but Samsung and its partners offered early buyers several preorder perks and trade-in offers that made the phone slightly more affordable. But if you don’t want to trade in your old smartphone to get a discounted Galaxy S10 and you don’t care about free Galaxy Buds, then all you have to do is wait for the price to drop.
Does Apple ever follow that same discount path?
Yes. And, well, no, not quite; but almost. Within weeks of iPhone XS, iPhone XS Max, and iPhone XR hitting the streets, we saw a growing number of unusual discounts from cellphone carriers and big box stores. About all Apple would do is to give customers a trade-in discount and that brings me to Apple’s nasty price secret.
Nasty? For whom?
Not Apple. Samsung, Google, and friends. Ed Hardy explains:
Although Apple makes some of the most expensive smartphones, these devices also depreciate in value far less than their rivals. In other words, iPhones cost more to buy but much less to use.
It’s that old total cost of ownership meme, the price vs. cost battle.
Hardy goes on to give an example that pits the more expensive iPhone X against the less expensive Samsung Galaxy S9 and their respective resale values. A new Galaxy S9 was priced nearly $280 less than a new iPhone X, but just less than a year later, the Galaxy S9 was worth barely half the used iPhone X.
Price vs. cost is a battle that few customers pay much attention to these days.
Yes, you save money up front when you buy a Samsung Galaxy-whatever vs. a comparable iPhone, but a year later the iPhone is worth substantially more, so if you sell it and upgrade to a new model, the actual cost of ownership is less than the Samsung.
Consider it this way: buying a Galaxy S9 instead of an iPhone X would have saved you $279. But 9 months later, if you’d resold the X you’d have $400 more than if you’d resold an S9. In other words, the iPhone is a much better value.
You can’t argue with math.
Yet, many gadget customers, car buyers, homeowners, and even those in business have no idea that there is a difference between price and cost.
Apple’s gadgets– Mac, iPhone, iPad, Watch– are priced higher than comparable name brands near the premium space– but they depreciate far less and command a far higher resale value, so in many cases they actually cost less to own than lesser brands with lower prices.
How nasty is that secret, Forbes?