Smartphones are quite popular these days but most aren't too affordable. I decided to make a research. Here are the reasons why some Android phones are expensive
Cost Of Production
The device manufacturers normally go through the cost of producing the device. They now decide how much they wish to make on the device. Apple makes about 3 times of the cost of producing their devices.
Profit Earned By The Company.
The lower the smartphone price, the lower the company earns and vice versa . I think this plays a major role in determining the price of a smartphone because if the manufacturers reduce the price, it would reflect on the price of the device in a few weeks.
Most smartphone companies divide their product targeting into 4. This helps them determine how much a product should be placed so that it gets to all classes of people in the economy.
1. Rich customer/customer who cares a lot about their tech/Customer who wants to look hip with the latest high-end tech – High-end smartphone AND high-end tablet (costs lot, big margins)
2. Poorer customer who just wants a smartphone or tablet – low-cost smartphone OR low cost tablet (pretty cheap, small margins)
3. Savvy customer who’s chosen what’s best for their (bigger) budget – High-end smartphone
4. Savvy poorer customer who’s chosen what’s best for their (smaller) budget – Low-end phone tab
Most of the times you wail and shout about the cost of a device without knowing that it's our exchange rate that's causing the rise in price. A Smartphone that should sell for N15,000 in a stable economy now sells for double of the price
Customer Reach Link
The number of people the phone goes through before it gets to you might determine the cost Let's assume that the importer of a phone of 15,000 sells it for N20,000 - Wholesaler buys from manufacturer and sells For N23,000 - Retailer buys from wholesaler and sells for N27,000.
You can see how the price has increased
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