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.