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Average iPhone Price Increases To $687 And Android Decreases To $254, Says Report

This article is more than 9 years old.

The price gap between iPhone and Android smartphones widened this past quarter, according to data compiled by ABI Research and The Wall Street Journal. While the average price of an iPhone jumped to $687, the price of Android devices dropped to $254. This means that the average price of the iPhone is about 2.7 times more than Android devices.

The average iPhone cost went from an estimated $600 in Q1 2014 to $687 in Q4 2014. The average price of Android devices dropped from $300-$350 in Q1 2014 to $254 in Q4 2014. The averages likely shifted due to the introduction of the higher-priced iPhone 6 Plus and the growing popularity of lower-cost Android smartphones. The iPhone 6 and iPhone 6 Plus costs between $649 and $949 off-contract, while many Android smartphones cost lower than $250 off-contract. Even Motorola is selling Android smartphones at lower costs like the Moto G for $179.99.

The shift in the average prices of iPhones and Android devices seemed to have a negative effect on Samsung. Samsung, the largest Android device manufacturer, announced their quarterly financials last week — which revealed a 64.2% profit drop.  Apple  shipped 74.5 million iPhones for the fourth quarter, a 90% increase from the previous quarter. This figure enabled the iPhone-maker to break a record profit of $18 billion -- the most profitable quarter ever reported by any company. Unfortunately, Android-based smartphone shipments dropped 5% to a total of 205.56 million units during the same quarter.

Samsung’s IT & Mobile Communications (IM) division is anticipating growth in emerging markets like China and India due to a growing demand for smartphones there. “Through new materials, innovative design and differentiated features, competitive products will be introduced to drive smartphone sales, while efficiency will be enhanced across R&D and marketing to increase profitability,” stated Samsung in their quarterly report.

Google ’s Android is being attacked by Apple’s iOS at the high end and forked Android and AOSP [Android Open Source Project] at the low end in high growth emerging markets. The Android One initiative has slowed forked Android and AOSP growth outside China, but Apple’s success has taken the high end of the market away from certified Android’s premium tier vendors,” said Nick Spencer, the senior practice director of the mobile devices division at ABI Research. Apple has been maintaining its status as a luxury brand. In China, Apple products are frequently given as a gift over  Gucci Cartier , Hermes, Chanel and Louis Vuitton products, reported survey company Hurun Report.

Lower-end Android device sales are dominated by Chinese smartphone company Xiaomi. Xiaomi sells its handsets for an average price of $220. Xiaomi’s most popular phone is the Redmi, which sells for only $100 in India. Xiaomi became the most valuable technology startup after raising $1.1 billion in December at a valuation of more than $46 billion. Through its sales of lower-cost Android devices, Xiaomi hit 500 million users in about four years.

The growth of Xiaomi’s low-end Android smartphones and Apple’s high-end iPhones indicates a decrease of demand for smartphones in the mid-range. If these trends continue, the average selling price of Androids will continue dropping and Apple will be able to retain its status as a luxury brand. Fortunately for consumers in emerging markets, Android manufacturers will continue to compete for the lowest price while Apple continues to break records.