December 2, 2020

Apple, Google, and Samsung are making the argument for a $1,000 smartphone tougher than ever. Now all eyes are on the iPhone 12.

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  • Apple, Google, and Samsung have all launched new smartphones in recent months that offer high-end features at a much more affordable price.
  • The latest in this trend is Google’s Pixel 5, which was announced on Wednesday and costs $100 less than its predecessor, the Pixel 4, did at launch.
  • Samsung also just launched a cheaper version of the Galaxy S20 that comes with 5G, a large borderless screen, and a triple-lens camera.
  • Now, all eyes will be on Apple to see how it prices the iPhone 12 lineup in a market that’s already saturated with more affordable 5G phones.
  • Visit Business Insider’s homepage for more stories.

After years of sky-high prices, major smartphone makers are changing their ways — and Google’s new Pixel 5 is just the latest example.

Google’s newly announced $700 Pixel 5 is the most recent indication that $1,000 is no longer be the normal price for new smartphones, coming just after Samsung announced a cheaper version of its Galaxy S20 that starts at the same price.

“What the world doesn’t seem like it needs right now is another $1,000 phone,” Rick Osterloh, Google’s senior vice president of devices and services, said on a call with reporters on Wednesday.

The two announcements are just the latest sign that tech giants are reversing the approach they’ve taken over the past three years, which saw smartphone prices climb as mobile devices gained advanced new features like facial recognition and edge-to-edge screens.

The launches also come just before Apple is expected to reveal the iPhone 12 this month, which many reports and analysts have predicted will be its first entry into the 5G market.

It’s a critical moment for Apple, as the iPhone 12 is expected to represent a major overhaul with a fresh design and new screen sizes among other changes. Even before the iPhone 11 lineup launched last year, analysts were banking on Apple’s 2020 iPhone to revitalize the company’s smartphone business, which has stagnated in recent years.

The iPhone 11 lineup, which was expected to be an incremental upgrade, performed better-than-expected in 2019, fueling a quarterly revenue record for the company’s fiscal first quarter of 2020. If Apple wants to uphold that success, it’ll have to keep the iPhone’s price competitive even with new features like 5G and an upgraded design.

Google and Samsung may be the latest major phone makers to introduce more affordable new models, but it’s a trend that Apple is well aware of. Apple launched the $400 iPhone SE in April, a device meant to be a more affordable entry point into its iOS ecosystem, which helped juice Apple’s revenue in its fiscal third quarter.

The cheapest smartphone in Apple’s flagship lineup, the $700 iPhone 11, was the world’s most popular smartphone in the first quarter of 2020, according to tech research firm Omdia — unseating the previous top choice, Apple’s budget-friendly $600 iPhone XR. 

The company is expected to leverage that consumer interest with four new iPhones in 2020: two less expensive models that will serve as sequels to the iPhone 11, and two premium versions to succeed the iPhone 11 Pro and 11 Pro Max.

Rumors also suggest Apple is indeed hoping to keep the next iPhone’s price from going up. TF International Securities analyst Ming-Chi Kuo has reported that Apple may not include wired headphones or a power adapter in the iPhone’s box as a cost-saving effort, according to 9to5Mac.

The case for an expensive, premium smartphone is tougher than ever as Apple, Google, and Samsung continue to deliver high-quality, budget-friendly phones.

Take Samsung’s Galaxy S20 Fan Edition as an example. The phone comes with a fast processor, a large screen with a higher refresh rate for smoother scrolling, 5G support, and a triple-lens camera for $700.

It has a plastic design and a lower-resolution camera, but with the S20 Fan Edition, Samsung isn’t asking customers to make any major compromises. It has all the basics you’ll find in the $1,000 Galaxy S20, or even in super-premium phones like the $1,300 Galaxy Note 20 Ultra, and signals how companies are starting to position their flagship phones.

With the Pixel 5, Google similarly axed sophisticated features like motion recognition to keep its price lower than that of last year’s Pixel 4. 

There’s a lot of excitement and anticipation around Apple’s next iPhone. But in a market that’s already flooded with relatively affordable 5G devices from Samsung, Google, OnePlus, and others, Apple would be wise to lean into the approach it’s taken with the iPhone 11 and iPhone XR to keep its ever-important iPhone business growing.