The upgrade syndrome makes us run to replace our telephones every few months, but the launch of the new Galaxy from Samsung, the S3, at NIS 3,700, brings home just how much the addiction costs. The highest price of the device is NIS 4,300, at Pelephone, but it can be obtained from Hot Mobile for NIS 4,140, at Home Cellular for NIS 3,700, and at Cellcom and Orange for about NIS 4,000.
Admittedly we are talking about the best smartphone currently on the market, but less than a year ago we awarded the same accolade to its elder brother, the S2, which was selling last June for the fantastic price of nearly NIS 5,000. Today, it sells for NIS 3,300 NIS 1,700 less.
New smartphones come onto the market all the time. Last week, the Galaxy S3 was launched in Israel; this week it will be the One X from HTC, and in a few months' time there will be the iPhone 5. The launch prices are very high, whereas customers who are prepared to wait six months to a year can pay 50% of the original price, with prices lower at the telephone stores.
The conclusion is clear, but many are in denial about it: customers who wait a few months before buying the S3 will get smartphones that do almost everything, at a discount of around NIS 1,600.
Smartphone launches have become frequent events, and the devices come with new features that weren't on the prevous model. The wireless carriers and the telephone chains know that consumers find it hard to resist buying the new device, when they advertise it on every available street hoarding and on Internet banners. The aim is to make consumers buy the telephone fast, while it is still considered the hottest thing on the market.
But anyone who spends a little time and effort reading reviews of the new models and obtains recommendations from friends will discover that the upgrades that the companies introduce from one model to the next are often fairly insignificant. No consumer, however much of a technology aficionado he or she may be, really needs a new smartphone every few months. As things stand, an upgrade every two years is quite enough, and makes more sense both economically and technologically.
Just don't pay in installments
Something else worth paying attention to is that, a few weeks ago, the wireless carriers changed their policies and started to sell handsets for cash at substantially lower prices than the total price paid in 36 installments. It is also possible to pay in a smaller number of installments (3-6) without interest.
This after all is the way we usually pay for any other product, whether it's a laptop, a television, or an air conditioner, and it makes more sense. It doesn't make us feel bound to the operator, and it doesn't foster the illusion that a telephone costs just 100 shekels a month. In wireless terms, 36 months is a technological eternity.
Arc S: down NIS 1,460
Sony Ericsson's Arc S was sold for NIS 3,600 in 36 installments when it was launched in December. Today, after the wireless carriers have started started selling telephones more widely for cash or in 3-6 installments, the same telephone costs NIS 2,140. That's a NIS 1,460 discount for a device that came onto the market seven months ago.
Incredible S: down nearly NIS 1,000
HTC's Incredible S started to be sold in Israel last November for NIS 3,560. Now, it costs NIS 2,600. Here too, the discount is substantial, at NI 960 in eight months. Anyone who was content to wait three months was able to obtain the handset for NIS 3,200.
Galaxy S2: down NIS 1,700
The Galaxy 2 from Samsung, which until a moment ago was one of the best telephones on the market, is currently being sold for NIS 3,300 by the wireless carriers, and at a discount of a few hundred shekels more by the telephone chain stores. When it was launched, less than a year ago (July 2011), it's price was nearly NIS 5,500, and in February it's price was still NIS 4,650. The discount now available is very large: NIS 1,700 at the carriers.
Motorola Razr: down NIS 1,400
Motorola's Razr, still their flagship model in the Israeli market, was sold for NIS 3,900 when it was launched last December. By February, its price had fallen to NIS 3,530. Today, six months after launch, the price stands at NIS 2,500. That's a discount of NIS 1,400, when Motorola Mobility Israel simply has no better model to offer.
iPhone 4S: down NIS 850
The iPhone 4S is exceptional, in that its price in installments is still stable even though seven months have gone by since its launch. The cash price is now NIS 850 below the original price.
Israel's wireless telephony market has been in a state of upheaval since Golan Telecom and Hot Mobile launched their services. MVNOs You Phone and Home Cellular are also selling, besides call minutes, cellphones at price lower than those of established carriers Cellcom, Orange, and Pelephone.
Yesterday, the Knesset Economic Affairs Committee approved the change in regulations for importing cellular devices into Israel. Minister of Communications Moshe Kahlon's reform is intended open up the cellphone market and make it more competitive, with importers able to bring handsets to Israel more easily.
The reform includes abolition of the need to obtain a trading license, and also allows an importer not to maintain a repair lab. The importer will not now have to obtain a permit to sell a telephone in Israel from the Ministry of Communications or indirectly from the wireless carriers. Instead, devices will need to meet US or European standards.
The reform still does not abolish purchase tax on telehones, which stands at 15%, in addition to VAT of 16%. The matter will shortly be reviewed. If purchase tax is removed, it will mean further scope for cellphone prices to fall.
Published by Globes [online], Israel business news - www.globes-online.com - on June 18, 2012
© Copyright of Globes Publisher Itonut (1983) Ltd. 2012