:format(webp)/cdn.vox-cdn.com/uploads/chorus_image/image/63711699/Galaxy_Note_7_blue_edge.0.jpeg)
With the launch of the Galaxy Note 7 Tuesday, Samsung is trying to prove once again that it can push the limits of the high-end Android phone market.
The Galaxy Note has been proving skeptics wrong since the phablet debuted back in 2011. Not only was the Korean phone maker right six years ago when it bet on giant phones, but in recent years the company has managed to push the product line into even higher price territory.
For the past two years Samsung has offered a workmanlike Note and a higher-end Edge version with curved glass. This time around, Samsung is doing away with the entry-level model and making the curved glass standard.
Samsung and LG have experimented with more radically curved options, including the Galaxy Round, LG G Flex and Galaxy Note Edge, but it is the subtle tapers that were part of last year’s Galaxy S6 Edge that seemed to enjoy the most widespread acceptance.
Curving the glass doesn’t really make the phone work any differently, but it does allow a larger display to fit into a smaller space and, well, just looks cool. With the Note 7, Samsung is also increasing the base memory and adding an iris scanner as an additional security measure.
The changes all but ensure that this year’s model will cost more than last year’s standard Note.
Samsung isn’t saying exactly how much the Note 7 will cost when it goes on sale Aug. 19, but it’s reasonable to think that it could be in the ballpark of last year’s curved-screen Galaxy S6 Edge+, which saw options topping $900.
Samsung’s ability to create a solid business out of phones that cost hundreds more than many rivals is a noteworthy achievement. Even last year the company seemed to be flying in the face of the industry’s trends, and the global smartphone market has only weakened since then.
And yet Samsung is continuing to push its large phone further into the stratosphere.
For its part, Samsung says phablets continue to be the fastest growing part of the phone business and that Note customers have been the most loyal Samsung phone buyers.
A big factor helping the market for ultra-high-end phones is the shift away from subsidized phones and toward monthly payments.
:format(webp):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/6874801/Samsung-GALAXY-Note-380x380.jpg)
In the past, even high-end phones really needed to hit a price where they could be offered by carriers for $199 or at most $299 with a subsidy to hit the mass market. With most customers now paying full price but over a couple of years, another $100 in price amounts to just a few bucks per month.
That has actually added room at the upper end of the market. Phone makers and carriers say the market is largely split between phones that cost only a few dollars a month or those, like the iPhone, Galaxy S and Galaxy Note, that can cost $25 or more per month.
"It’s the middle ground that is compressing," said Tim Baxter, president of Samsung Electronics America, adding that a significant premium market has emerged for smartphones.
"That’s not that unique to phones," he said. "We see it in televisions, we see it in cars."
The big question now facing both Apple and Samsung is whether consumers will still replace these pricey phones every two years or if they will try to hold onto their phablets a little longer.
At one end of the market, some early adopters are now replacing their phones as often as every year, thanks to leasing and other programs. However, it appears a more significant chunk of consumers are holding onto the devices longer than two years, something that could hurt phone makers.
Because the cellphone carriers are no longer subsidizing phones as part of a two-year contract, those consumers willing to hold onto their phone longer can see their monthly bills drop once their phone is paid off.
This article originally appeared on Recode.net.
