Falling Price of Mobile Phones

The mobile phone market is a good example of how to explain some basic concepts of supply and demand. For example, it shows how improved technology and increased supply – can reduce price, even as demand rises.

According to Evalueserve – Nokia, one of the world’s largest mobile manufacturer, recorded an approximately 39 per cent fall in its average selling price (ASP) between 2005 and 2009.

The good news for users is that over the next five or ten years, the price of mobile phones is forecast to fall. This is primarily due to the increased competition and increased supply from major producers. As markets reach saturation point, demand will increase at a slower rate. (5% a year until 2015)

Supply and Demand Diagram for Falling Mobile Phone Prices


This article, suggests that a key factor in reducing prices will be the growth of markets in developing economies, such as India and China. Typically, these economies have smaller disposable income, so there will be greater pressure for manufacturers to price competitively. Combined with improvements in technology, and greater competition, prices could fall up to 70 per cent (4.8 billion of active mobile phones across the globe are below USD 100 by 2015), according to a recent study.

Mobile Phones in UK


Mobile phone subscriptions have reached saturation point in UK. But, supply continues to increase as firms report high levels of inventories (stocks of phones).

Another factor that helped reduce the price of mobile phones is that telecommunication firms have often subsidised mobile phone handsets to lock customers into profitable contracts. Firms are happy to make a loss on selling a mobile phone, if they can capture the customers cost of paying telephone calls. [1]

History of Mobile Phone Prices

The Shrinking Cost of Mobile Phone Technology

3 thoughts on “Falling Price of Mobile Phones”

  1. Yes, it is the fact that the mobile phone price is getting more less compare to the earlier due to which the economics is not stable so itis having it for the other reason also and getting it the best electronics to use.

  2. I am using the best price of mobile phone which is working very fine and In this post, you provide all the information about the falling price of the mobile phone. it is really helpful to me. And if I have any issue then I go to the technical support to solve the problem. This post is very nice and great.

  3. Thanks for this informative article. I was looking for a solution since long time. There are plenty answers are around but your article solved my issue. Thanks. Keep blogging.


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