Samsung is replacing Apple as the new luxury tech company with smartphones that cost thousands of dollars

  • Apple has long had a reputation as being a luxury brand.
  • But the iPhone maker has been increasingly focused on more affordable products in recent years, like the $400 iPhone SE and $700 iPhone 11.
  • That's expected to continue with the iPhone 12, according to analysts and gadget leakers.
  • Samsung, meanwhile, is leaning more heavily into the luxury market with devices like the $2,000 Galaxy Z Fold and $1,400 Galaxy S20 Ultra. 
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For years, Apple held a reputation for being a luxury tech company, thanks in part to recent moves like the launch of the $1,000 iPhone X in 2017 and the appointment of former Burberry CEO Angela Ahrendts to run its retail business from 2014 through April 2019.

A 2018 National Bureau of Economic Research paper even found that owning an iPhone was a sign of high income.

But if recent product launches are any indication, it seems like that narrative could be changing. Apple has broadened its product lineup to incorporate more affordable products, while Samsung has increasingly targeted the high-end with its flagship phones as well as new categories like foldable phones.

Of course, Samsung also offers options aimed at budget-minded consumers. Its Galaxy A series, for example, offers features previously reserved for premium devices like multiple cameras, 5G support, and borderless screens for hundreds of dollars less than its Galaxy S series phones. 

But at a time when industry rivals like Apple, Google, and OnePlus are combatting the trend of rising smartphone prices that's emerged in recent years, Samsung's pricey Galaxy S, Galaxy Note, and Galaxy Fold phones continue to be the center of its major events and launches.

That differs from Apple's recent approach. The company launched a $400 iPhone called the iPhone SE in April, helping boost sales at a time when many shoppers have been strapped for cash because of the coronavirus pandemic. But it's not just the iPhone SE — Apple learned from the success of the iPhone XR in 2018 that cheaper devices tend to be more popular. 

As such, it changed up its branding in 2019, positioning the $700 iPhone 11 as its flagship model rather than just a follow-up to the iPhone XR. Its iPhone 11 Pro line, by comparison, was positioned as just that: an option for power users willing to pay an extra $300 for a triple camera and other extras. 

If analyst predictions turn out to be accurate, the company plans to continue with that approach this year and beyond.

Some versions of Apple's next generation iPhone 12 may cost under $1,000 despite the addition of 5G support, Wedbush Securities analyst Daniel Ives wrote in a recent research note. YouTube personality Jon Prosser also reported that the non-Pro version of the iPhone 12 could start at $650, making it $50 cheaper than the iPhone 11's starting price. Apple could roll out a cheaper version of the iPhone 12 without 5G support in early 2021, Ives also predicts. 

If that wasn't enough to prove that Apple is expanding more deeply into budget-friendly devices, Bloomberg also reports that the company will release a low-cost Apple Watch this year alongside an Apple Watch Series 6. 

It's no secret why Apple has chosen to take this route. Apple's iPhone XR, which now sells for $600, was the most-shipped phone of 2019, according to Omdia's Smartphone Model Tracker Report. Following it was the $700 iPhone 11 and then Samsung's line of cheaper Galaxy A series smartphones. A report from NPD Group published in December indicated that just under 10% of consumers are spending more than $1,000 on new smartphones. 

Samsung, meanwhile, is leaning more heavily into the luxury smartphone market. On September 18, it will launch the Galaxy Z Fold 2, a $2,000 foldable phone with a 7.3-inch screen that folds in half to serve as both a smartphone and a tablet.

Earlier this year, it launched a $1,400 phone called the Galaxy S20 Ultra that offers a camera capable of zooming at up to 100X. It did not offer a less expensive model alongside the $1,000 Galaxy S20, $1,200 Galaxy S20 Plus, and $1,400 Galaxy S20 Ultra as it did last year with the Galaxy S10e. 

It's hard to say whether this will impact Samsung's smartphone sales in any way. Samsung was the second largest smartphone maker in the world in terms of shipments in the second quarter of 2020, according to The International Data Corporation, beating Apple. But it also saw the biggest year-over-year decline of any of the top five smartphone makers, a dip that the IDC attributes to Samsung's focus on premium devices. 

"While the A series continues to perform well contributing to the majority of its volume, premium devices such the Galaxy S20 and the Galaxy Z Flip, unfortunately launched in the peak of the pandemic, are facing sales challenges despite price reductions," the IDC wrote. 

Regardless, the notion that Samsung may be challenging Apple's longstanding reputation as a luxury tech brand is yet another interesting wrinkle in the decade-old race between the two tech giants.  

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