The best time to buy a flagship smartphone?

Whenever the latest and greatest flagship smartphone is released, it’s very tempting to trade in your old model and upgrade immediately. Buying a new smartphone is not always a straightforward choice; unless you have simply chosen your favourite brand, buying one that fits your needs and budget can be a tough choice.

It is also a matter of careful timing – is it best to pick up a new phone immediately upon release or wait a few months?

In this post, we examine when and where to buy a new flagship smartphone, and pay particular attention to the iPhone 6 price plans on the major UK operators.

What makes a flagship smartphone?

It might seem obvious what the term “flagship smartphone” means, but it is sometimes used quite loosely. To most people, it is simply the most powerful (and expensive) model in a company’s lineup. To others, it refers to the best-selling device, not necessarily the most advanced one.

Here are some examples of the use of ‘flagship smartphone’ by the manufacturers:

“Features and functionality is an obvious one. To take the literal meaning of flagship the device with the most, and best, features would be the one at the top of the heap.” – Nokia

“Sony introduces Xperia Z2, its new premium flagship waterproof smartphone with best ever display, 4K recording and Digital Noise Cancelling technology.” – Sony, February 2014

…and in the media

“The Samsung Galaxy S5 is the latest flagship smartphone from the Korean electronics giant” – The Guardian, April 2014

“A better way to evaluate the iPhone 6 and 6 Plus launch, he argues, is a comparison of initial weekend sales of the flagship iPhone 5s” – Re/Code, September 2014

Almost universally, flagship smartphone really does mean the very latest and feature-packed device that represents the best a manufacturer has to offer.

In terms of features, you should expect to find some of the following on any new flagship device:

• Premium materials and excellent build quality
• At least a 4.5″ screen size, but commonly 5″ or more
• Hi-resolution full 1080p HD display (400+ pixels per inch)
• A quad-core CPU (e.g. Snapdragon) at 2 GHz+
• 4G LTE, 802.11ac WiFi, and Bluetooth 4.0 LE
• “4K” resolution video recording
• 20 megapixel camera, high quality optics
• Advanced features such as biometric and fitness sensors (heart rate, pedometer, etc)

Choosing the best time to buy a flagship smartphone

Opinions on the best time to buy differ widely, depending on factors such as the make and model, whether you’re already on a mobile contract (and when it expires), and whether you want your phone to retain its maximum value for as long as possible.

To summarise our key findings:

• Most new smartphone prices drop by 30% within 6 months
• If bought through an operator, upgrade after 2 years otherwise you’re paying for a new phone anyway as the price plan usually stays the same
• Many major releases are between September and December, so that’s the best time to pick up the latest flagship smartphone
• December great for deals (e.g. smartphone + gift card), and there will be fewer promotions after the holiday season

Apple iPhone

The iPhone is a perennially popular device, a fact reflected in its consistently high resale values and popularity on sites such as EBay.

The new price for Apple’s iPhone doesn’t decrease much until new ones are on the horizon (September each year), and the very best deals can be found soon after its release.

Many people complain that the iPhone is expensive, but forget that it will keep its value much longer than most Android smartphones. Unfortunately for anyone looking to buy a new one, it means that one month after a new iPhone is released it’s only possible to find discounts of around 10%.

Example price history

As an example of Apple’s flagship smartphone from last year, the iPhone 5s, here’s how its price history stacks up:

• The UK launch price was £549
• Within 3 months it could be obtained for around £475 (-13%)
• Within 6 months it could be obtained for around £450 (-18%)
• After 1 year the iPhone 5S is still selling for £400+ (£459 in the Apple store, 16 GB model)

 

Android Phones

Three months is perhaps the sweet spot when buying a new Android smartphone. By this time, technical problems (with Android and any vendor-specific software) are usually fixed, and there are steep discounts that continue for longer (due to intense competition in the Android market).

It’s worth noting that the Galaxy S5 lost 30% of its original price after only 2 months on sale. Most Samsung Galaxy models follow a similar pattern in the months after release, a trend that seems to be getting stronger with each subsequent smartphone in the Galaxy range:

• The Galaxy S3 experienced a price decline of 14% after 3 months
• The Galaxy S4, which was released in May 2013, was 18% cheaper by August 2013

 

Example price history: Samsung Galaxy S5:

Actual new prices for the Galaxy S5 since launch have largely followed those predicted in Idealo’s chart above.

• The UK price at launch was £550
• Within 3 months it could be obtained for around £400 (-27%)
• Within 6 months it could be obtained for around £350 (-36%)

 

Windows Phones

For anyone intent on buying a Windows Phone, there has never been a better time due to the variety of models on offer at every price point. There is less of a market cycle like iOS and Android; rather there is a slower steady stream of new handsets spread fairly evenly throughout the year. Therefore, there’s perhaps less of an optimum time to buy a new Windows Phone smartphone.

Windows Phone fall rapidly after the first few months, so it’s best to purchase under 6 months to obtain a respectable discount, or simply to wait for a new model that may be just around the corner.

Example price history: Nokia Lumia 930

• UK price at launch £550
• Now it can be obtained for £399 at Amazon (-27%)
• £344 at Tiptopelectronics.co.uk (-37%)

How fast do smartphones depreciate?

Unfortunately, all smartphones depreciate in value noticeably once new models are announced and the initial wow factor has worn off, compounded by newer competing models from other manufacturers that sway buyers with more powerful and up to date technology.

On average across all phones, a typical device will have lost 50% of its value after a year, but:

• The typical iPhone resale value is 63% after one year
• The typical Android resale value is 46% after one year

It is also apparent that Apple iPhones depreciate less than any other smartphone – food for thought if you are intent on selling your old phone for as much as possible before upgrading.

Where to buy smartphones

The choice of where to buy a smartphone really depends on several factors, such as whether you intend to buy a new or a used one. Direct from the manufacturers (for example, through the Apple store or from the Nokia website) is perhaps the easiest option but you’ll pay a premium for the privilege.

The operators are also convenient since they have online stores and a high street retail presence. If you want to get hands on with a new smartphone before buying one, visiting the high street retailers gives you a chance to really play with the devices and ask questions. The main advantage buying through the mobile operators is that it’s possible to view and compare the network tariffs directly and obtain a complete package of phone, SIM and data bundle. Again, you won’t necessarily find the cheapest price if you’re opting for a phone on its own, but there are special deals from time to time.

Independent retailers (such as Expansys and Amazon) tend to offer the most competitive prices on nearly every smartphone model, but there are also alternatives like AliExpress and the various Chinese import websites – here you can definitely pick up a bargain, but be prepared to search for the best prices and retailers with a good reputation. We advise caution against purchasing an imported Chinese Android smartphone – there will be a 361Degrees podcast on this very topic later in the year.

Who are the cheapest retailer for smartphones?

The big name online retailers remain some of the most popular places to buy new smartphones in the UK, and with good reason – you’re pretty much guaranteed fast delivery, good after-sales service and a wide selection of products at competitive prices.

Taking a recent Motorola handset (the very highly rated and affordable Moto G) as an example, we compared the prices across some of the most well known websites.

As shown below, Amazon is the cheapest for the Moto G at just £144.99, while Argos is the most expensive at £159.99. On the whole, for many of the most popular devices, Amazon is consistently one of the cheapest retailers…

 

Various price comparison websites (such as Revooly.com) also confirm that Amazon offers the best price on the Moto G, although it can be found in used condition for less on EBay:

Which operator offers the best iPhone 6 price plans?

We were interested in comparing the UK’s best total (2 year) prices for Apple’s latest flagship smartphone, the iPhone 6. As the most popular smartphones at the moment prices are unsurprisingly high, but which mobile operator can offer you the best deals?

Here’s a table highlighting the total cost of the iPhone 6 (64 GB version) across EE, Vodafone, O2 and Three on a monthly plan. The up-front cost and monthly costs are highlighted for each, plus the total price you can expect to pay over the 2 year period.

 

On a 2GB data plan, it’s clear that Three and O2 are the best value at £1,083 and £1,162 respectively. Vodafone is by far the dearest at £1,293.

 

Data-hungry users may of course need more than 2GB of data per month – the chart below shows the total price for a 20 GB plan (Three actually states unlimited).

Again, O2 and Three are the cheapest, with Vodafone being the most expensive.

It’s worth noting that Three also seems to be winning awards lately as the best network, and with the fewest consumers complaints received via Ofcom.

 

Final thoughts

The question of when to buy a new flagship smartphone is not as straightforward as it seems. If you want the very latest gadget and are prepared to pay a premium, then buying immediately when a new model is released isn’t really of much consequence. However, by waiting a month or two you can pick up a great phone at a substantial discount (particularly for Android smartphones). New iPhone prices on the other hand tend to remain high – conversely, when you come to trade in your old phone for the latest one it will cost you less to upgrade.

Personally, I tend to rush out and buy the latest iPhone as soon as it’s available…is that a good thing?

All this and much more is discussed in a related episode of the 361 degrees podcast.