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Smartphone price gap narrows

Average subsidized US smartphone price rises to $117.08 in April

Analysts expect the price gap between high-end and low-end smartphones to decrease, based on trends shown in new research.

If they wanted the absolute freedom of an unlocked device untethered to a particular operator or plan, in April 2010 US smartphone users would have paid on average $431.49 (up from a March average of $387.22.) 

If on the other hand they were shopping for a smartphone deal they’d actually have given you money to take a phone off their hands (though they’d have taken back via the service plan they’d sell you.)

Between these extremes lie the subsidized prices offered by mobile operators and by consumer electronics retailers such as Amazon.com and Best Buy.

ABI Research found the average subsidized April US smartphone price from retailers (not mobile operators but nonetheless offering phone with service plans) to be $43.64.

In contrast, the subsidized average price available from operators (the big “top four” plus three Tier Two operators) was $117.08. The price differential between the largest four operators is about 18 percent.

“The wide variation in smartphone pricing illustrates how difficult it is for handset vendors to price their new products competitively, especially because prices change over time,” says ABI Research senior analyst Michael Morgan.

“One of the most important factors determining average prices is the number of handset models of a particular type on the market at any given time. In April we saw the introduction of some high-end devices that lifted the average price.”

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