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Smartphones are getting more expensive around the world

That’s after years of eroding prices.

Two customers shop for new iPhones in an Apple store.
Customers in San Francisco browse the new, more expensive iPhone 8 and 8 Plus at the Apple Store.
Justin Sullivan / Getty

Globally, the average price of a smartphone is expected to rise 6 percent to $324 this year, according to new data from GfK, a market research firm that collects customer checkout data.

The hike is surprising as the price of smartphones — and electronics in general — tends to decrease over time as components are produced in larger quantities, bringing costs down. Ever since Apple released the first iPhone, competition has been lowering prices as more players entered the market with cheaper and cheaper options.

Additionally, smartphone demand in markets like India and China brought about local competitors whose lower prices appealed to customers in those areas, driving down the average price of phones globally.

Now, however, as the majority of people in the world become smartphone owners, smartphone makers are adding in all sorts of new features to encourage consumers to upgrade their phones. These upgrades engender bigger price tags.

The data only measured full-price phones over time and did not include prices for subsidized phones made cheaper by carrier contracts. Those subsidies started going away around 2013 and ended altogether earlier this year as pricing wars between the carriers hurt their businesses.

Not only did the latest Apple iPhone and Samsung Galaxy smartphones sport bigger price tags than their predecessors, but less expensive brands like China’s Huawei have also raised prices on premium phones.

And consumers have been willing to pay for the upgrades.

The average price for a smartphone in North America rose 4 percent to over $400 in the third quarter of 2017 compared with a year earlier. In China, it rose 15 percent to $327 in that same time.

Note that GfK did not adjust these prices for inflation since those rates vary significantly in markets around the world. For context, U.S. inflation has risen 6.7 percent since 2012, according to the Bureau of Labor Statistics, so $100 in 2012 would cost nearly $107 today.

The GfK data includes point-of-sale data in more than 75 markets. GfK used monthly data to the end of August 2017, plus weekly data to the end of September.


This article originally appeared on Recode.net.

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