Technology companies sell premium devices without price adjustment. Find out why.
Apple is not the only smartphone maker to keep the launch price of the iPhone 15 announced this Thursday (12) at the same level as the previous generation iPhone 14, launched in Brazil in October 2022. Even though some believe that this tactic delays development in the market.
This price is also practiced by Samsung, Apple's main competitor and leader in the mobile phone market worldwide. When announcing the Galaxy S23 model, launched in the Brazilian market in February, the brand maintained the price in relation to last year's S22 series. Continue reading and understand the reasons for this strategy.
Focus on premium sales
This strategy is an attempt to increase the share of top-of-the-line or super-premium models in total cell phone sales in Brazil. This niche segment still represents a low share of total cell phone sales. In the first half of this year, only 3.8% of the cell phones sold in Brazilian retail were top-of-the-line models priced at R$$ 5.3 thousand and above. The percentage registered a slight drop of 0.3 percentage points compared to the share of 4.1% in the first half of 2022, according to data collected by the consultancy GfK on behalf of Valor.
Most of the devices sold in Brazil from January to June (43.6% of sales) were in the range of up to 1,100 reais, with prices of basic models exceeding those of premium models from Apple and Samsung, including foldable and removable models.
Motorola also operates in this segment. Some Brazilians who bought a cell phone ended up migrating to a mid-priced model of the brand. The share of smartphones priced up to R$1,100 decreased by 1.1 percentage points compared to the first half of 2022, but models in the price range of R$2,000 to R$5,300 increased their share of total sales.
The original price of iPhone 15 in the US it was kept at the launch price of the iPhone 14 (US$1,799). In Brazil, the 15 series will cost R$7,299, slightly cheaper than the launch price of R$7,599 of the iPhone 14, which hit stores in October 2022. Galaxy S23 It was launched in February at a price of 5,999 reais, the same price as the S22 version launched a year ago. In the US, the S23 cost US$ 100 more than the previous version.
Scenario forecasts
Experts predict that sales of the new generation of premium devices could pick up slightly as the base price drop cycle begins in August and the Black Friday shopping season kicks off in November. Barring a renewed boost in the smartphone market in the fourth quarter, industry-wide sales are expected to decline by 6% in 2023.
If this scenario is confirmed, it will be the worst result in a decade, consultancy firm Counterpoint Research predicted in mid-August.
For Fernando Bialuna, Head of Consulting and Retail for Latin America at GfK, Brazilians are keeping up with the pace of upgrading to higher quality devices, but the economic scenario has not been favorable for the niche market of top-of-the-line models.
