Money

Let’s Talk: Is your smartphone really worth the money?

The world is literally at your fingertips in a smartphone.

Taking the plunge to buy a smartphone may seem like a frivolous purchase – especially as most of us grew up with a landline and the internet was something completely foreign. 

The idea of having that much technology in the palm of your hand can seem pretty far out. My own parents still carry around a flip phone that allows them to make calls or send texts; however, texting from a flip phone is akin to sending a homing pigeon as far as I’m concerned. 

While the outright costs of buying a smartphone may seem outrageous – after all paying upwards of $1,500 for a high-quality mobile is not pocket change – but if you think about how much a smartphone can do and all in the palm of your hand, the cost is actually justifiable. 

Technology and telco editor Alex Kidman from finder.com.au says that if you compare the cost and functionality of a phone from 2000 to now, you’ll find that you’re actually getting quite a lot of value for money. 

Kidman says that nowadays, all smartphones have inbuilt digital cameras and while quality varies with price, top-end smartphones like Apple’s iPhone 7 or Samsung’s Galaxy S8 have top-notch digital cameras. If you compare this to 17 years ago, a digital camera would have cost you more than $800 and that was without the ability to send an email, make a phone call or check your social media (admittedly, only MySpace was around back then and there’s no way you could have loaded that onto even the smartest of phones). 

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Kidman points out that a smartphone today now functions as a capable video recorder with higher resolutions than any video camera from 2000. Plus that same camera, via an app, can also function as a portable document scanner which was something that didn’t even exist at the turn of the century. 

“The early 2000s also saw the rise of the personal music player via Apple’s wildly successful iPod line, but back in 2000 you would have had to opt for a third-party player for around $500,” Kidman says.

“Likewise, you’d have to stuff your already-crammed pockets with a portable TV, an in-car GPS, a torch, a palmtop computer to hold your calendar, address book, etc, a portable game player plus games and a radio. And as you toppled due to the sheer weight of all these items, you would’ve realised that you’d forgotten to include an actual mobile phone, so calling for help might be tricky.

“Presuming you could somehow nail all these gadgets together, making yourself the technology equivalent of a one-man band setup, you’d still be significantly out of pocket compared to the cost of a single smartphone, even accounting for inflation.”

To help you cost compare, Kidman used real-world prices from the year 2000 and adjusted them to 2017: 

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Gadget Description Year Advertised RRP Cost AUD
Digital video recorder Sony Handycam DCR-PC5 2000 US$1,500 $2,507
Digital camera Nikon Coolpix 950 2000 US$497 $830
Image scanner HP ScanJet 6300Cxi 2000 US$315 $526
Music player Pine SA6400 MP3 Player 2000 US$300 $501
GPS device Garmin eMap GPS 2000 US$299 $500
Handheld computer 3Com Palm Vx 2000 US$269 $449
Mobile phone Nokia 3310 2000 US$200 $334
Handheld TV Sony Watchman 1999 US$170 $284
Additional storage SD Card (512MB) 2002 US$150 $251
Games Gameboy 1999 AUD$130 $130
Radio FRS-114Y Two-Way Radio 2000 US$60 $100
Torch Eveready Illuminator   AUD$20 $20
Total cost     $6,432
Inflation-driven cost in 2017     $9,813
Source: finder.com.au    

 

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When you think about it, paying around $1,500 today to buy a smartphone outright doesn’t seem too outrageous after all. 

“There’s plenty of competition in the smartphone space and there are many mid-range and budget options that should fit most consumer’s needs without needlessly emptying their bank balances,” Kidman says.

“Not everyone needs the highest of high-end devices, but that doesn’t automatically make them “bad” value.”

Do you own a smartphone? 

Important information: The information provided on this website is of a general nature and for information purposes only. It does not take into account your objectives, financial situation or needs. It is not financial product advice and must not be relied upon as such. Before making any financial decision you should determine whether the information is appropriate in terms of your particular circumstances and seek advice from an independent licensed financial services professional.
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