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Consumer preferences and implicit prices of smartphone characteristics

Author

Listed:
  • José A. Montenegro

    (Department of Computer Science, University of Málaga)

  • José L. Torres

    (Department of Economics, University of Málaga)

Abstract

This paper applies the hedonic pricing approach to study the implicit prices of smartphone characteristics and consumer preferences. Currently, mobile phones are the most widespread technological product worldwide and their performance and technical characteristics have changed dramatically over a short period. The development of smartphones has been a revolution in itself in the mobile telecommunication industry, expanding the capabilities of handsets beyond those of a simple mobile phone. Competition between smartphone producers is erce and knowledge concerning consumers' preferences regarding smartphone features is vital to survival in this fast-changing market. This paper uses a hedonic pricing model to estimate the implicit prices of smartphone characteristics. A large set of characteristics are analysed including design, communication, connectivity, camera, display, hardware, multimedia, and power. The characteristics most valued by consumers are the screen, followed by memory, battery capacity, and weight. Consumers are willing to pay up to a 95% premium for an Apple smartphone.

Suggested Citation

  • José A. Montenegro & José L. Torres, 2016. "Consumer preferences and implicit prices of smartphone characteristics," Working Papers 2016-04, Universidad de Málaga, Department of Economic Theory, Málaga Economic Theory Research Center.
    • Handle: RePEc:mal:wpaper:2016-4
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    File URL: https://theeconomics.uma.es/malagawpseries/Papers/METCwp2016-4.pdf
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    References listed on IDEAS

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    Cited by:

    1. Ahmad, Waseem & Ahmed, Tanvir & Ahmad, Bashir, 2019. "Pricing of mobile phone attributes at the retail level in a developing country: Hedonic analysis," Telecommunications Policy, Elsevier, vol. 43(4), pages 299-309.

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    Keywords

    Smartphones; hedonic pricing approach; characteristics' implicit prices; consumer preferences.;
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