Why Cheap Smartphones Are Going To Upset the Industry 234
An anonymous reader writes "Just when people got used to good smartphones costing $200 with a 2-year contract, they also started to realize that those 2-year contracts were bad news. Still, it's often more palatable than fronting $600 for good, new hardware. But that's starting to change. Cell phone internals are getting cheap enough that prices for capable devices have been creeping downward below $200 without a contract. We ran into something similar with the PC industry some years back — previous-gen chips had no trouble running next-gen software (excluding games with bleeding-edge graphics), and so the impetus to keep getting the latest-and-greatest hardware disappeared for a lot of people. That revolution is underway now for smartphones, and it's going to shake things up for everybody, including Apple and Samsung. But the biggest effects will be felt in the developing world: '[F]or a vast number of people in a vast number of countries, the cheap handset will be the first screen, and the only screen. Their primary interface with the world. A way of connecting to the Internet where there are no telephone lines or coaxial cables or even electricity. In nations without subsidized cell phone contracts or access to consumer credit, the $50-and-you-own-it handset is going to be transformative.'"
Only in USA (Score:1, Interesting)
Where people are still dumb enough to buy phones on contract. Every other country, civilized or not, the people pay for the phone and buy the service they need
Upset the industry? (Score:4, Interesting)
Except in places where data is limited to a fault, ie anywhere that isn't urban america and/or some other afluent cities (like London). Same reason why SDCards aren't going to die for android, as much as google might want you to stream your music it just isn't possible and a sub 2gig plan. Even then it's still stupid. So long as there are stupid caps to the level of data that companies will give people nothing like this will take off. Take my plan for example. I live in Australia and all the plans from every comapny around $30AUS a month have about 200-400 MB worht of data. to get anything worth while you have to go up to $60 a month which for a lot of people isn't something they can do. It's similarly shitty in a lot of other countries too
Re:Sigh (Score:5, Interesting)
You're absolutely right, but in addition to that the cellphone business (smart or dumb) has always been a crazy business to be in, even crazier than PC/laptop's. There it was about price, so the change was always slower and smoother (might take 5 years to be put out of business).
The cellphone biz is insane. Remember when Nokia was king of the hill? Blackberry, Motorola, etc., etc. It's probably better business to be a component supplier. The margins may get thin as the prices go down, but it's all about performance and price. Chip sets (the RF/DSP stuff, not ARM's), displays, etc.
Electronics: the only business where prices go down.
I wish there were more like it. They keep telling us that inflation is low because smart phones are getting cheaper, and a pair of socks is $0.05 cheaper because they're now made in a country where people earn $2/day instead of $3. Never mind that nobody can afford medical insurance (yes, before Obamacare too, w/ double-digit inflation), and going to college (let alone grad school) means mortgaging your children's children.
Here's one for you who complain about old fart stories. Between a partial scholarship, federal grants (yes grants, not loans, and my family was working class, not poor) and employer tuition payments (100% if you got a 'B' or better), I got my BSEE and MSEE without paying a cent in tuition. I'm not gloating, because it was not because of anything brilliant that I did. I wish we still had it because my kids are approaching college age. But inflation is low!
But you already can get good cheap phones... (Score:4, Interesting)
... it is just that the phone networks don't want you to have them.
I have a 5", quad core, 2GB RAM, 32GB Flash smart phone from Chinavasion [chinavasion.com]. It is much like a Samsung S4, and cost US$250. Unlocked as a standard feature, and with dual SIM, Took five days to from order to doorstep. Plugged in my work SIM and my own SIM and gave back a my work's S3.
A cheap 4" can be had for under $70.
Re:Upset the industry? (Score:5, Interesting)
First "someone" isn't enough. It needs to be someone sufficiently educated.
Yes, it's called a virtuous cycle. Educate some people, they can teach more people, etc. It's worked pretty well for thousands of years.
And you need one for about every 30 children or so. And if you are unlucky, all you get out of it is maybe 10 educated people, the others either can't attend, at least not regularly, get too sick, die, ...
That was my point about people needing enough to eat and being in good enough health to learn something.
It is incredibly expensive ...
Labor rates are pretty cheap there.
simply doesn't scale and as a result in general just does not happen
That must explain why, for example, in colonial America most people were illiterate. Oh, wait, the American colonies were known for having a very high literacy rate, and people from the mother country who came here were amazed at not just the literacy rate, even amongst the poor, but how well read and informed many of them were. And it was done with, wait for this, drum roll ... one room school houses. Apparently some of the people who learned there, got a little more education, and then taught in other schools. It was amazing! I forgot to add: they didn't have cell phones or the Internet. Apparently they thought indoor plumbing was a higher priority. Such ignorant fools!
Even in 21st century America cell phones, the Internet, laptops, etc. have done remarkably little to improve education. Do you know that when TV first came along they thought it would be a great educational tool. Long distance classes and so forth may be great at a college level, but do you really think that'll work for a bunch of grade school kids? Maybe when they improve image recognition enough so that it can figure out whether little Bobby in the back needs to go #1 or #2.