Smartphone prices are going down despite inflation

Yahoo Finance Live anchors break down the chart of the day.

Video Transcript

BRIAN CHEUNG: Well, turning now to our Chart of the Day, we’re talking about inflation, breaking down that CPI report. And inflation is affecting nearly all categories, but there are some areas where we’re not only not seeing inflation, but we’re actually seeing deflation. Check out smartphone prices. This is measured in the Consumer Price Index, indexed to December of 2019. This isn’t necessarily just a raw percentage that you see year over year. But prices for smartphones have gone down. And this, by the way, is not a pandemic trend. This is a secular trend that we’ve been seeing over time. Now, it’s important, Akiko, to note that the way that the CPI calculates smartphone prices includes promotions. So–

AKIKO FUJITA: I was going to ask that. From looking at the numbers, like, it hasn’t gone down.

BRIAN CHEUNG: Well, you know that the price of a single iPhone is over $1,000. I mean, it’s very expensive, but you see the retailers like Verizon, I mean, you go to the store, and they’re like, if you open up a line with us, we’ll throw you two iPhones for free.

AKIKO FUJITA: Buy one, get one free.

BRIAN CHEUNG: Buy one, get one free. I mean, it’s not often the case, especially for iPhones, that even off cycle, you’ll get deals on the highest end. I mean, I picked up a new iPhone 13 Pro, like, during the last few months. And you never see discounts. Like, basically, you trade in your old phone, you get, like, $600, $700, $800 off. It’s crazy. So this is despite the chip shortage.

AKIKO FUJITA: Despite the chip shortage. I wonder how much of that also has to do with the cheaper models that are now out there if you look at some of these brands.

BRIAN CHEUNG: Right, and of course, we’re not talking about the highest end, in many cases. I mean, a large share of phone purchases are these kind of recycled parts type of phones that Apple has been putting out. And we know that it’s not just Apple either. There are a lot of low cost carriers that are also having other off-brand types of phones as well. But either way you cut it or slice it, look, inflation’s everywhere.

AKIKO FUJITA: We’ll take it.

BRIAN CHEUNG: But not everywhere. So we’ll take what we can get.

AKIKO FUJITA: We’ll take the chart for today.