So you want to buy a new phone:
Is it worth the wait?

It is no secret that new flagship phones are losing significantly in value in the first few months of their availability. This is the norm in a highly dynamic market with annual innovation cycles. Nevertheless, it is interesting to trace the curves of the decline of retail prices over the various product iterations.

So when is the best time to buy a new phone after its launch? Is it worth waiting a few more weeks?
I think this can be calculated in three easy steps…

 
 

Step 1: Get yourself some prices

I looked at the price history of a few popular telephone series over the first three sales years. The data was extracted from a popular German price comparison website and normalized for weekly averages. Examined were Apple's iPhones, Samsung's Galaxy series as well as Huawei’s P series. If you plot the data over time, characteristic patterns appear between the manufacturers.

Two trends can be seen in the pricing of the Samsung Galaxy series: The devices have gradually become more expensive over the iterations, but adopt very similar pricing patterns. They are introduced to the market in regular innovation cycles and have very steep price decline curves.

The pricing structures of Apple iPhones are also expected to decline. However, these a little more flat overall. The (simplified) finding is therefore that Iphones are more stable in terms of their retail price than Samsung devices. Remarkable is the price jump of the iPhone 6s model in the course of the introduction of the iPhone 8.

Huawei, as you can see at first glance, has long since ceased to be the low-cost manufacturer he was at earlier iterations of the P Series. With the last two models of the series, the Chinese have caught up with the Americans and Koreans.


Step 2: Normalize them for release date

To make a comparison between a manufacturer's products, I normalize the prices by days since the release of the product. I'm looking at the first year, as we see a relevant part of the price drop at this time and before the launch of the next iteration.

Very exciting to have a look at at Samsung Galaxy: About 60 days after release, practically all prices (regardless of the initial price of the model!) have converged to approx. 610€. The drop in prices is stronger for the newer (and more expensive) models of the series than for the models up to the Galaxy S6 & S7.

Apples iPhone prices show a flatter curve. Launch prices remain relatively stable and also the price progressions did not show a very broad bandwidth. However, the increase in release date prices for each new model is clearly visible.

In contrast to the Samsung models, the Huawei P series is relatively stable in price: even after one year, the absolute retail prices have not fully converged: If a model is more expensive at the beginning than its predecessor, this is also the case to a lesser extent after one year.


Step 3: Normalize them for maximum price

The last, and most revealing step of the processing is the normalization not only to the release date but also to the release price. This allows the progress curves of the individual telephones to be compared with each other and across the manufacturers. In some cases, similar curves can be seen and it is also easy to tell when individual phones perform worse than their predecessors or successors.

It turns out that with many of the models analysed here you can save 20-30% of the sales price if you are willing to wait about 60 days before the purchase. Considering that you will then still own the latest model for about 300 days, this is a pretty good compromise.

In other words: For every day on which you do NOT buy the new device in the first 60 days, you will be "rewarded" with approx. 0.3% of the initial price. With a 900€ smartphone for example this is amounts to 3€ per day. Since the curves are not linear, however, you can save a lot more per day, especially in the first 2-4 weeks.


Conclusion: So when should buy your new phone?
The results of this analysis were not particularly surprising in itself: new phones fall sharply in price in the first few months. But the similarity of the price trends was (at least for me) somewhat unexpected and I think one can obtain some insights for the purchase of the next telephone:

  • new phone generations become more expensive (jup, ok, I knew that much…)

  • the price of new phone generations is falling faster than in the past

  • the first <60-70 days see the strongest decline of the curve for Samsung Galaxy and Huawei P series

  • the Apple iPhone is somewhat more stable