When a new smartphone is released, people are eager to have it in their hands as soon as possible. One of the best examples is the release of the Samsung Galaxy S5. Since the earliest rumours about Samsung's new flagship smartphone began circulating, search volume has increased rapidly. The number of people searching for Galaxy S5 increased by 230 per cent from January to February, showing how new technologies captivate people.
Christian Schiller, co-founder of the price comparison website PricePanda, commented on the recent launch: "From the price development of the former Galaxy smartphones that we have observed on our website, we believe that major price drops for the S5 will take place shortly. For those who consider buying the S5, we recommend waiting until May, as the phone should be about 24 per cent cheaper than it is [in February]."
This looks promising for those who have yet to buy the Galaxy S5. It also indicates a risk - if the price keeps falling at the same rate, buyers cannot take profit from the resale values.
As carrying the newest models is a trend now, customers are beginning to think more about the depreciation value of the smartphones when they consider buying the latest technologies. Which one is the best investment to make? After some time, the product's retail value falls. But, should we wait to have the smartphone we want?
If we wait, another new, more technologically-advanced model will emerge. So let's buy that smartphone now and choose the one with the smallest depreciation rate so we can sell it again! This mindset - where a smartphone's resale value strongly influences the decision to purchase - reflects a new trend. Buyers are also concerned over which smartphone will bring the best returns for their former owners.
As seen from the chart, Apple iPhone holds more value than the Samsung Galaxy. The price of Samsung smartphones drops faster when compared to that of the iPhones. One reason for this is Apple's iPhone strategy - its strongly-managed product branding strategy focuses on premium smartphones. The resulting price depreciation in the first months since the product's release is thus less compared to its competitors.
The HTC One has proved to be very price resistant when compared to its competitors. Their prices drop by only 25 per cent in a period of around 12 months after its release.
Samsung smartphones are losing this battle by showing a faster price decrease as compared to their biggest competitors. One of the Samsung smartphone flagships, Samsung Galaxy S4, has dropped in value by 42 per cent. This is a considerable figure if we compare it with iPhone 5 which price drops by 36 per cent.
This article was contributed by PricePanda and edited by AsiaOne.