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Why are smartphones so expensive?

Why are smartphones so dear compared to -- for example -- games consoles?

Most Useful Answer matt101101  Aug. 30, 2011 at 12:46

Very small components with no active cooling = very expensive. If you touched the processor in a games console it'd probably burn your hand, whereas a phone has to be cool enough to hold and very small. Also smartphones tend to be network subsidised on contract, and to some extent PAYG, which reduces the price vs SIM free.

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matt101101 / MOD  Aug. 30, 2011 at 12:46

Very small components with no active cooling = very expensive. If you touched the processor in a games console it'd probably burn your hand, whereas a phone has to be cool enough to hold and very small. Also smartphones tend to be network subsidised on contract, and to some extent PAYG, which reduces the price vs SIM free.

blizzard7  Aug. 30, 2011 at 13:12

Adding to matt's answer, consoles are also sold at only just above break-even most of the time. They then get their profit from secondary purchases like buying accessories (such as controllers, headsets, subscriptions) and games. Phone manufacturers don't have a secondary source of income as reliable as this, so they have to make a profit from the start.

matt101101 / MOD  Aug. 30, 2011 at 13:51

Blizzard is right, people don't tend to give any more cash to, for example, HTC or Samsung, once they've made the initial purchase of the phone. Also consoles were way more expensive when they were new technology, the PS3 retailed for over £500 when it first came out.

blizzard7  Aug. 30, 2011 at 14:34

Even at £500, Sony was still making a big loss per console at launch :P

matt101101 / MOD  Aug. 30, 2011 at 14:36

Blizzard is right, people don't tend to give any more cash to, for example, HTC or Samsung, once they've made the initial purchase of the phone. Also consoles were way more expensive when they were new technology, the PS3 retailed for over £500 when it first came out.

matt101101 / MOD  Aug. 30, 2011 at 15:02

That's true, Sony only made their money back on game sales, same goes for Microsoft with the Xbox 360.

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