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The Frightening Rise of cell phone prices

Cell phone prices have soared, with Apple and Samsung introducing four-digit smartphone price tags in 2017, now offering multiple models in this range, while Google has joined the high-price market. Although promotions and trade-in deals provide some relief, the average U.S. smartphone price has surged from $409 in 2016 to $735 annually, driven by a mature market with limited growth prospects, pushing manufacturers to raise prices. Apple, defying the trend, experienced a 22% increase in iPhone unit sales last year, marking its first double-digit growth since 2015. Flexible-screen devices nearing $2,000, however, account for just 3% of U.S. smartphone sales, raising questions about how high prices can go. While consumers are willing to pay more, especially for premium smartphones priced at $800 and above, this trend relies heavily on carrier promotions. Breaking this cycle may be challenging, with Apple’s pricing power fully apparent when consumers bear the full cost.

For smart financial decisions on iPhones:

Budget Models: Apple’s budget-friendly options, like the iPhone SE, provide affordability without sacrificing the Apple experience.

Trade-In Programs: Utilize trade-in and upgrade programs from Apple and carriers to lower the cost of upgrading.

Flexible Financing: Seek lower interest rates and extended payment plans for high-end iPhones.

Carrier Deals: Keep an eye on carrier subsidies and promotions to reduce upfront costs.

Transparency: Demand clear pricing breakdowns from Apple to understand value.

Innovation Justifies: High-end iPhones offer advanced features justifying their cost.

Support Competition: Encourage market competition for price checks.

Regulation: Advocate for regulations preventing monopolistic practices.

Value in Older Models: Older iPhones with extended support can be cost-effective.

Consider Alternatives: Explore mid-range or older models for value without compromising quality.

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