Why Phone Prices don’t reflect Performance

Why Phone Prices don’t reflect Performance

OK, so I’m in a very strange location, there is a strange logo on the wall and an even stranger man walking into the frame right now. Who are you and what do you want? This is my house and I invited you here! Hi, I’m Alex, the LowSpecGamer, I torture the graphics of PC games for the sake of performance and in the world of PC gaming there is some correlation between the cost of a component and the performance that you can expect from it. However, when I tried repeating this experiment on mobile phones, I realized that their pricing makes no sense to me. That is until you factor in the business logic of these companies, which is why we decided to make a two-part video series on this topic. On my half, I will be testing the performance of a wide range and variety of phones, particularly on games. And I will talk about the business logic explaining why price and performance on phones doesn’t seem to match up. Thanks to Brilliant for sponsoring this video. and for giving the first 200 people who sign up 20% off their premium subscription. Alright, Alex did all of the testing, you should watch his video right here, but first, let’s hear a summary of it. So, instead of trying synthetic benchmarks, I thought it would be more interesting to test actual game performance. I picked PUBG mobile and ARK because they are two games that I’m very familiar with the performance profile, and also, I know they can bring a phone to its knees. And in several scenarios I noticed that the cheaper Pocophone was outperforming comparable flagships, and this, to me, made no sense. It doesn’t make sense in a Vacuum. But it does when you consider the whole economics of making a device. Predictable price/performance ratios are usually
a bad sign for the companies selling stuff, but a good sign for consumers buying stuff. They usually mean that the companies are generally
not very powerful. Cause being able to charge extra for a product is usually
a sign of some kind of strong leverage. Either a unique brand or some unique technology that others don’t have or an ecosystem that people are unwilling to leave, and PC makers seem to have much less of that than phone makers. For a start, PCs are way less differentiated
than phones. Here are some examples: – Typical computer chips are standardized,
are limited to Intel and maybe, in some cases AMD, and can be bought by anyone for more
or less the same amount of money. Mobile chips though aren’t that standard. On top of the generic Qualcomm and MediaTek
chips available to all, each of the top 3 leading phone makers, so Apple, Samsung and
Huawei have their own exclusive chips designed, and in some cases built in-house and a few
others, like Google, Xiaomi, LG, are trying to come up with their own chips too. Software on laptops is completely standardized too. Most laptops run Windows and that’s that. Microsoft doesn’t let companies fiddle with
the software beyond providing drivers and maybe pre-installing a few apps most people
won’t use anyway and Microsoft handles software updates to Windows, not the manufacturers. Android makers on the other hand actually
take a basic version of Android and do most of the heavy lifting from there. They are responsible for updates and they
can heavily customize their software. So which company you buy your phone from will
heavily impact your software experience. – Even more importantly, cameras, the components
of a smartphone consumers seem to care about the most, are NOT completely commoditized either. Companies can decide how many cameras they
use, flagship models often use exclusive image sensors, lenses, stabilization and almost
all of them develop their own camera software which heavily influences image quality. Given how much people care about cameras,
this is a crucial point of differentiation, the likes of which PC makers just don’t have. – And then add to that that phones also have
custom notch/hole-punch cutouts, in-display fingerprint readers, multi-camera setups,
proprietary fast charging solutions like OPPO’s SuperVOOC or OnePlus’ Warp Charge, and there
is actually quite a bit of customization, while most PC hardware, except for maybe Surface
devices and a few crazy gaming devices, is relatively standard. PC makers are, simply put, closer to being “dumb”
assemblers of standardardized components that everyone on the market can buy than phone
makers, hence the more standardized pricing. And of course a lot of things that actually differentiate phones these days, like better cameras that are maybe actually motorized or better build quality or smaller notches, these are things aren’t performance-enhancing, so they don’t show up in Alex’ tests, but they do significantly impact costs. Moving on, there is also what I will call
“componentization”. The PC market is completely broken into components. You, the end consumer, can buy each component
and even each part of the software one by one and assemble it yourself. OK, there are extremes, like you can’t just
assemble a Surface Pro yourself, but you can assemble a PC yourself and at least replace
parts even in most laptops. Hell, even when you buy Ultrabooks you can
often at least configure it yourself with the specs you want. You can see the individual cost of each component,
so you can know approximately how much a computer with a specific spec sheet should cost. Phones are sold as complete packages though. Qualcomm won’t sell you one chip, Sony won’t
sell you a camera sensor and Google won’t let you license Google Apps for one phone. And even if they did, you couldn’t put those
together and make phone out of them. You can’t even pick and choose your own specs
when you buy a phone because everything is so tightly integrated. Nothing can be purchased, assembled or configured
by the end user, so consumers don’t actually know how much a phone should cost, and that lets phone companies get, let’s just say …, more creative with pricing. And then we also shouldn’t forget user psychology. Because people don’t just buy phones for their
specs, they also pay for the brand, and for how a product makes them feel. Phones are the most personal consumer electronic device for most users by far because we carry our phones with us everywhere. Our friends, lovers and people in our communities
all see our phones with us all the time, so for many, they are not just tools, they are
also an accessory. Like with clothes, we don’t just buy phones
that perform well, but also ones that we think will express who we are. They are often a status symbol, a fashion
accessory, maybe a sign that we are modern and tech-savvy, and so on. Now to some extent, this does apply to PCs
too, especially for gamers who do see PCs as part of their identity. Hence why they spend the extra money to buy
fancy tempered glass cases, RGB lighting and whatever else that goes beyond just the specs,
but to the majority of the over 1.5 billion PC users,
computers are not very personal. They are a tool to file their taxes and send
emails from work, often actually provided by their company and usually only seen by their colleagues
and maybe their family. So PC makers have a hard time establishing
strong brands and lots of intangible assets people would actually pay extra for. And then there is one last piece to this puzzle. Because of all the things I’ve said before, phone companies do have the option to create their own … well, let’s just call them alternative business models. See, the business of a PC maker is mostly
just making and selling the PC itself. But, because phone makers have significant
control over their products, they can use that phone to sell you a whole bunch of other
stuff too. Xiaomi instantly comes to mind here, their
business model is really quite fascinating, which is why I have dedicated a whole video
to it, and it’s no wonder that the Poco Phone, which prompted Alex to do this whole analysis
in the first place, is so damn cheap. Xiaomi doesn’t want to make a profit on its hardware. It doesn’t have to. It sells phones at cost to get as many users
as possible and then tries to make money from those users by showing them ads as well as
trying to convince them to pay for Xiaomi services like their music and video streaming
services. And Xiaomi isn’t alone. Apple makes over 10 billion dollars a quarter
from services running mostly on its iPhones, Huawei tries to sell cloud services
and fitness trackers, Samsung has Samsung Pay, their own app store
and is trying to leverage SmartThings and Bixby on their phones to sell you Samsung
home appliances, Gear VR headsets, 360 degree cameras and so on. Phone makers can create ecosystems. They can subsidize one part of their business with another, and that can create impossibly cheap devices like the Pocophone for example. PC makers simply don’t have enough control over
their business to do the same. On the PC side, it’s companies like Microsoft
and Intel who have all the power and therefore make most of the money. There are of course some PC brands like Microsoft’s
Surface division and Apple’s Mac line that were able to get past simple price/performance
business models too. And if you think about it, those two have many
of the same strengths that smartphones do. An aspirational brand people can personally identify
with, differentiated products, either through unique hardware or software and a strong ecosystem play. It is just that the mass market PCs, unlike
the mass market phones, have very little room to do the same. Now, I shot this video in Barcelona where I was
constantly on the move to cover new gadgets and meet people and it’s here that I really started appreciating Brilliant’s Daily Problems. You can actually learn real maths, science,
and engineering in tiny, convenient packages in just 5-10 minutes a day, even on your phone. They publish several problems every day, and
each one has the context and ideas that you need to tackle it, so it’s fast and fun and
yet you really learn the concepts behind it. There’s a full course associated with each
daily problem if you want to go deeper, and there are thousands of users discussing the
solutions if you get stuck. You can try Brilliant for free and the first
200 people to sign up using my link in the description get 20% off their premium subscription,
so you can view all the daily problems in the archives and unlock every course. Go and try it now!

100 thoughts on “Why Phone Prices don’t reflect Performance

  1. While the world of PC Gaming still is a bit weary of the effect Phones are having on gaming as a whole, it is interesting to think how the two platforms inherently have radically different approach at the same problems. I think as the generations who come online with a Phone rather than a PC become older we are going to see more interesting overlaps in these companies and their strategies.

    But I also think there should be "Gaming" phones that had gamepads on them so what do I know?

  2. Hardware customization in mobile phones was allowed up to certain degree in modular phones. But those phones never really catched up .

  3. @4:40 It is more important that customers are actually willing to pay a premium for such micro-improvements, whereas in the PC world it is more about raw performance.

  4. If my phone has to be an accessory with a message to it, it would probably be that I want it to work with minimal unnecessary costly features. This is why I follow random Chinese brands and their offerings.

  5. I think buying the newest model flagship is stupid. Just buy last years flagship Samsung and get more for a lot less. Right now you can buy an s8 for less than four hundred. You get the best display, headphone jack, expandable memory and very small bezels.

  6. This was the last thing I had expected, really, it's on the same level as the AVGN walking into the frame to explain why everything is shit

    Nice work

  7. RGB keyboards are tools, just get a decent mechanical keyboard (meaning no cherry MX red switches, which are also for tools).

  8. Why price != Performance? Because it's apple, and if you're an apple user, apple knows that you people are mentally handicapped and they tune their products and price like that

  9. So mobile device companies refuse to standardize manufacturing so they can continue to price gouge consumers

  10. i can sum up both sides and parts of this vid in one comment.. smartphones are shit. and manufactures, are dreedy pricks.. see just saved myself 20 min of redundancy

  11. You never talk about Kenya or Estonia, I really wanna hear about these countries that are so much in gadgets and tech.

    Kenya esp, where people would rather have a smart phone and data bundles instead of food. Post something about the silent big phone market in Africa.

  12. Because these days they are more about status, fashion, bling, the performance is just there to have a ,,real,, excuse to buy them. Nobody really needs the performance phones are putting out today. It’s nice to have, yes, needed, no, not right now.

  13. There's performance, but there is also future proofing and quality material.

    Extremely cheap phones are the bottom of the line when it comes to upgrades.

    An extremely cheap phone might be still fast but have shitty build quality.

  14. But if I don't need camera inside my phone at all, manufacturers decide for me. They took my 3,5 jack, battery capacity and make smartphones fragile as f. On other hand I can build PC by myself. Why da fuck there is no such a thing for smartphones?

  15. Xiaomi: If we make the phones dirt cheap, then we can make money from the services
    Apple: We have the most expensive phones coupled with the most expensive services and we are ultra popular for no reason

  16. When it became necessary recently to buy a new cellphone (my 5 yr old Droid Razr HD stopped recognizing SIM cards when we changed providers) I bought the Moto e5, unlocked*, for around $130. It does what it needs to do (make and receive phone calls, keep addresses and notes) at an affordable price, and I'm not *excessively tied to someone's ecosystem (hello Apple).

    My PC acquisitions are different. I usually re-purpose used equipment, and run Linux; the laptops being made these days are too flimsy in construction and lacking in connectivity/expandability. And my next desktop system will be my own custom build, since the mid-towers you get from the big-box stores or direct (from Dell, etc) are taking too many clues from the cellphone makers and using too many proprietary/specialized parts. I miss my old InWin Q500 case.

  17. Cuz you’re stupid, performance of executing software is only a small aspect of “performance”. Power efficiently is also a performance metric, size to performance ratio is also a performance metric, camera performance is also a performance metric, display performance is also performance metric, the mechanical properties of the casing is also a metric performance. When you’re retarded and only look At antutu scores, no the “performance” doesn’t correspond to price.

  18. Companies get "creative" with their prices ~ meaning, they charge whatever, since the buyers aren't really tech savvy and the phone may look flashy and shiny, but it' just gimmicks, the phone isn't that good. In other words ~ the companies are ripping people off.

  19. I think the only notebook brand that ppl would pay premium for was (well still is but sadly it's really declining lately) different and offered unique features was ThinkPad – mainly for their superior build quality and track point which is just much faster and more convenient for heavy users than touch pad.

  20. why are a load of youtubers putting out content, sponsored by Brilliant, about the cost of mobile phones vs performance?

  21. I really like your thought and analysis of the technology sector. Especially since you an european/global perspective on the market.
    Just one thing about the end of your video. It should be better that it has a clearer and conclusion. Now it just flows into the commercial which is a really weird end. It's more acceptable in the middle of the video, although I think it would be better with a clear seperation.

  22. Am I the only one that prefers something like a galaxy s6 over a xiaomi mi a2 lite? Aka no notch > notch

  23. Why prices don't match performance

    -> Proceeds to talk for an hour without showing the way price doesn't correlate with performance.


  24. Answer: because there's a reason pc is called the master race™. Open source. Modding. Proof via benchmarks. Drivers which enable hardware to work together. Usb ports. Emulation. A hundred other reasons. PC users are part of a community, not a business. They want to be able to mod and customize their games/computer environments because they are the users. They work together to accomplish this. Phone companies do not. As you explained. Everyone does their own thing to try and steal the other guy's market share.

    Phone companies waste their budget on making their own version of something that's been done six times before. Pc users say screw that. I want it free and I want all of us to get together to make it good.

    Phones are like a community of people who think everyone of a different race is ugly and stupid and so they keep to themselves and make everything in their own fashion for their own people. PCs are more like a community that says I don't care what you look like, let's go play some games and have a good time. They appreciate each other's skill for the benefits it brings to themselves and others. Phone companies make you buy things without a removable battery. They disable root access. They don't let you choose the software you want. Everything is anti-consumer.

    Trying to get rich makes you a bad person. You forget about making something good and instead lie and cheat and make poor quality products that will break quickly so you can sell another one.

    You should be ashamed of this behavior. Not rationalize and excuse it. We aren't animals anymore. We don't have to bare our teeth at anyone who's trying to eat from the same tree. We should work together on everything, phones included.

    That's why phones are inconsistent and unfairly priced. You have a bunch of good-for-nothing's making them instead of we, the people.

  25. Still on that Kyocera life…i mean duraforce pro…the hydro life still works though. No performance, mid range price.

  26. Sony xperia XA1 performs well for the price, especially if you aren't looking for fingerprint sensor , super fancy camera, and 1080p + screen on a phone.

  27. Xiaomi is showing adds ? What does it means exactly ? How does this work in practice ?
    I'm curious about these phones (coming from Samsung) but I loathe advertising.

  28. Pocophone has sd card slot 64-128 GB price jump: 20 usd
    Mi 9 does not have sd card slot 64-128 GB price jump 100 usd
    I'll be damned if you pay for the component cost.

  29. I'm a pc master race. I don't know how it is with the noobs, but RGB is just a useless pain. Better go for a titan X or a 2080ti, if you want swag, or an sli 1070/2070 for price/performance 😀 The rusty case around, no one really cares.
    As for mobile gaming … i play dragon quest serie while i poop. One doesn't need more from a smartphone.

  30. 2:22 How can you be a host of a tech channel with almost 400k subscribers and think computer chips are limited to Intel? Such statement wouldn't make sense even in the worst times for AMD, let alone in 2019…

  31. I’d like to see a video on best phones for cost with a chart comparing specs and price showing the best value ones

  32. I'd argue reviewers care more about cameras than consumers because these yearly phone releases are actually nonsensical and they're desperately trying to make reviewing one SD845, 6GB RAM, 64GB 5.8-6.4" lcd/amoled phone different than the other.
    It's the similar case to this bezeless craze that manufacturers care about to try and differentiate their phones and push unto the consumer, rather than something the consumers collectively asked for.
    I have NEVER heard the average consumer say 3-4 years ago ask for bezel-less phones with ugly notches. Similarly I've never heard the average consumer obsess over cameras beyond 'does it take good photos'?
    Ok then I'm good; pretty much all phones take good photos these days.

  33. "users pay for how the device makes them feel" So buying an LG means I bought a massive disappointment? Seems about right. Screw carrier phones.

  34. It's all about upscaling,
    You've got a few dollars of plastic,
    A few dollars of chips, boards,
    few dollars of screen and cameras
    few dollars of speaker, amp, and headphones,
    and a few dollars worth battery.
    The biggest expense is the army of marketing specialists and programmers and engineers.
    This is also why lots of staff can make a great app but one person designing will be a more niche / rugged exp.

  35. Hey, the MacBook keyboard layout at 7:02 is Cyrillic! 🙂
    Very nice and interesting video, thank you for your work!

  36. OnePlus 7 Pro the #1 flagship in 2019!!🙂☝️ Pop up camera, no notch or hole 🕳 punch camera, screen recording, 12 GBs of Ram, and 855 Snapdragon Chip!🙂

  37. No one expect to run high performance apps on a phone such as simulation, rendering or other CPU/GPU/RAM demanding task, while running on battery mode, so pricing does not reflect performance, it reflects on marketing gimmick to keep the hype alive.

    e.g. dedicated digital camera will always perform better than any module inside the smartphone, yet people buy smartphone more so than a dedicated digital camera, due to "convenience" not performance.

    No one can definitively quantify "convenience" as it differ from person to person, therefore pricing are wildly fluctuating between different models due to "consumer hype" or perceived demands.

    e.g. foldable phones produces the most hype and it a new category, therefore let "markup the price to 2x flagship phones", even though to produce a fold-able only cost 1.2x to 1.8x (not 2x) to make if compared to a single screen size flagship phone.

  38. You two are the most comfortable pair of hosts I've ever seen, it makes for such an enjoyable video! Hope you do more together

  39. I need to know who this average person is because nobody I know gives a shit what phone or laptop they use except how well it works.

  40. Disclaimer: I'm not a hater of Xiaomi, I even use one as my main phone.

    I think Xiaomi devices' prices cannot be used for this kind of comparisons for the simple reason that they have very intrinsically designed ads throughout the whole OS (they can be disabled but it's not straightforward enough for people to discover how to by themselves and require various separate steps). Therefore they can (and are) selling hardware at cost or even at a loss and making it back with the ad revenue, which is unique to Xiaomi as far as I'm aware of (unlike data collection that every manufacturarer, google and most apps do). Other companies might make money from the pre-installed bloat, but that's not nearly as profitable as MIUI 10's current Ad game. Plus, Xiaomi admitted that in this stage they're not planning on growing the revenue, but the brand and amount of customers, so given the aggressive OS monetization that would REQUIRE selling hardware at a loss.

  41. Smartphones getting bigger and better fo4 the seek of cameras and games but mobile games still don't compete with handheld consoles like psp or switch

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