Smartphone Price Premium Ebbs for 5G – The Wall Street Journal

SEOUL—5G, the next-generation wireless standard once exclusively the province of top-line smartphones, is sliding into more affordable handsets faster than expected.

Just months ago, analysts had expected that 5G would jump start the industry after years of declining shipments. But smartphone manufacturers, already dealing with cooling consumer demand for expensive gadgets, have been walloped by the economic effects of the coronavirus pandemic.

Now, Samsung Electronics Co. and others are increasingly using 5G and the prospects for superfast data transmission to sweeten the appeal of cheaper phones and to get reluctant users to buy into a technology that has stirred little enthusiasm beyond early adopters. The slowing pace of advancements in smartphone technology has contributed to weakening sales in recent years.

Globally, the average selling price of a 5G-enabled phone fell to $813 during the first three months of 2020, a sharp reduction from the prior year’s $1,186, according to Canalys, a market-research firm. The slide is fueled by China’s 5G rollout, where such devices fetch lower prices, said Nicole Peng, a Canalys analyst.

Samsung , which has been aggressive in its 5G strategy, said Wednesday its newest 5G enabled Galaxy Note 20 would sell for $1,000 starting later this month. When the South Korean tech giant released its $600 Galaxy A71 handset in June, it became the cheapest 5G offering available in the U.S. This time last year, Samsung set the price for its premium 5G-enabled Galaxy Note 10 Plus at $1,300. The company pushed to have the first 5G devices on the market and invested heavily in marketing them to gain an edge over other manufacturers.