
The Cheap Phones Quietly Winning the U.S - adventured
http://www.bloomberg.com/news/articles/2015-09-03/zte-s-cheap-phones-quietly-winning-the-u-s-
======
bobajeff
Moto G seems be my baseline for what I expect a good enough phone to be. That
honor used to belong to the Galaxy S III US. Ver.

I expect others like ZTE and Alcatel will catch up at some point. But probably
will also face some fearce competition from the quality direct-to-customer
type companies like Xiaomi, OnePlus, Wileyfox.

~~~
nothis
So what's the catch with the ZTE? Processor speed is boring. Is it the touch
screen being unresponsive? Some software thing? Bad screen? Does it break
easily?

~~~
ck2
The catch is you probably cannot root it.

ZTE has gotten VERY good at locking down their phones, the bootloader checks
and undoes root and the kernel seems to detect attempts otherwise.

For me, non-root is a showstopper.

~~~
diyorgasms
If they are preventing you from loading your own software, in my mind that
lends credence to the idea that ZTE has some sort of spying capability (beyond
the usual smartphone spying capabilities) that they really don't want to lose.

~~~
hellbanner
Perhaps that's why they're so cheap - their cost is subsidised by the
listeners?

~~~
nothis
You know, 3 years ago I would have called that paranoid. Now? Not so sure.

------
wambotron
I own a Nokia Lumia Icon (Verizon) and a Microsoft Lumia 640 (T-Mobile). The
Icon was bought on a plan and was $199 subsidized. The 640 was bought off-
contract for $99. I believe the Icon was selling for around $700 off-contract.
I've used both extensively now (the Icon was my old daily phone, the 640 is my
new one). The 640 is lacking in the camera. That's it. Every other experience
on the phone? Identical. I don't miss the Icon at all, and I think that really
says something.

Why would a phone 6-7x the price be roughly equivalent in experience? Why
should it be? The 640 isn't subsidized by anything. $99 is the just the price
of it. It's an amazing device, FAR better than an equivalent android.

People complain about Windows Phone not having "flagship" devices, but
realistically, it doesn't need them. The cheap phones are great.

I've tried expensive android phones, iphone, as well. None of them stand up to
the experience on WP for me. If Microsoft keeps making $100 phones like this,
I'll never pay more than that for a phone.

~~~
virmundi
Hey, I'm glad you're liking the WP. Honestly, I think WP should be great. That
said....

Android phones are starting to get into this territory too. OnePlus 2 is $400.
That is 4x the cost of your $100. But it is less than half the cost of my
$1000 Note 2. (I don't buy on contract because I have a grandfather plan on VZ
for unlimited data). My wife's phone was $700. Next refresh in about 2 years
we'll be in the OnePlus store.

The reason I say all of this is that we should all, across every platform but
Apple, be looking forward to getting less expensive, higher quality devices.

~~~
randomhunt
I'm hoping that Android gets a lot better on the battery usage before that
happens in earnest though. I've read they've focused on this recently but I
haven't had time to drill into details.

I love Windows Phone and have had 3 different models since Windows Phone 7.
I'm currently on a Lumia 830 for my private phone and get about 3.5-4 days of
battery life. Granted I don't call/text a lot relying on email, Lync and
Skype. My previous Lumia 520 was about the same, and the previous LG E900 was
2.5-3 days.

My partner has a Moto G (1st Generation) and loves it but only gets about
1-1.5 days of battery life. Good phone, similar price levels after offers on
the Lumia 830, but dramatically lower battery life.

------
aidenn0
The last phone I had last for more than 2 years was made by Palm. After that:

1) lost the phone. We think it was left on the roof of my car

2) Dropped in toilet. Did not have removable battery, so it eventually shorted
out

3) An OTA firmware update bricked it, the device was 2 months out of warranty
so the manufacturer refused to fix it, despite their software being what
bricked it.

I'm now on a 1st gen Moto X I got used for $100. I don't plan on spending much
more than that for a phone ever again.

~~~
andyidsinga
what do you use for a computer most of the time?

reason I ask: I'm on my galaxy note 4 probably 40% of time and going up.pc/mac
get rest of time and going down.

got rid of all IOS devices.

~~~
aidenn0
Most of my time on the computer is at work, so I have a Dell Optiplex with 2
24" screens. At home, I have both a workstation and a laptop, and probably use
the laptop more. I use the phone for a quick lookup something, or for reading
articles, watching videos &ct.

~~~
andyidsinga
getting multi-screens connected to my "phone" is the key thing I'm missing. I
can do it with one now -- but its not as good as attaching a mac/pc to an
external monitor for coding or similar big screen tasks.

I'd put cyanogenmod on my note4 - but then I'd loose the cool pen feature that
I use a lot.

I wonder if intel and microsoft will succeeed in shrinking the tablet/pc all
the way down to phone size before the phone guys figure this out - I would
love that (disclaimer I work for intel).

------
coldcode
Except of course for Apple with 44% of the market in the US, which is
increasing, and somewhere around 90% of the profit. Winning in Android is a
race to the bottom where only the cheap survive, exactly what happened to Dell
and its competitors in the PC market. And someday Google will decide it needs
to actually make money from Android and that world will fork into Google
Android Phone and the seven dwarf versions.

~~~
cuicuocua
I can't picture a day Google decides make money directly out of Android. It
gets them tons of users to their services which gets them tons of money. And
all companies building Android phones are doing the selling hard part instead
of Google. Far more likely is an ever greater interaction between Android,
online services and chrome OS until they all mix undistinguished or one takes
over the others.

~~~
bryanlarsen
Google already makes money from Android. The base OS is free, but they charge
for the application, store and play services bundle, IIRC.

------
tsotha
As phone subsidies go away there's going to be a lot more price pressure on
mobile hardware vendors.

~~~
baldfat
Well the issue is people STILL won't see the bottom line price. They will get
the monthly price. A LG G3 is $17 a month and an iPhone 6 is $25. People do
horrible math and don't see that they are paying $200 more for an iPhone 6.

~~~
merpnderp
People will pay $5K more for an equivalent Toyota. It doesn't mean they are
doing horrible math. Maybe they've sold a previous Toyota and realized, used,
they bring in significantly more than the Chevy.

~~~
baldfat
Me: You know your paying $200 more for that phone right?

Them: No, really?

Me: It is $8 a month more and at 2 years that is 24 * 8. So in 2 years you are
paying $192 more.

Them: Shocked look and than they try to do the math in their head and can't
and just shrug.

This has happened with family members and strangers

People can't do simple math in their head. My definition of simple math is
business math and specifically do a 2 digit times a 1 digit number.

~~~
merpnderp
Are you really an adult if you can't do basic maths? I mean in the modern,
self actualized, responsible for you own actions, type of adult?

~~~
mod
Yes.

I would say that the majority of adults fall into that category (not knowing
they're paying $200 extra, that is), and they all manage to take care of
themselves, somehow.

Many aren't very good at that, either.

------
thoward
This article reminds me of the "shitphone" story that got posted here a while
back. Long but definitely worthwhile IMHO.

[https://medium.com/matter/shitphone-a-love-
story-a44e6643480...](https://medium.com/matter/shitphone-a-love-
story-a44e66434807)

Basically an exploration of value. An iPhone can cost 3x times as much as some
of these other phones, and is certainly a more pleasant device to use, but
does it really offer 3x as much functionality?

The basic (world-changing) functions of the smartphone (location services with
GPS, decent point and shoot camera with you at all times, web access on the
go, etc.) are present in both devices.

~~~
vinceyuan
> _The basic (world-changing) functions of the smartphone (location services
> with GPS, decent point and shoot camera with you at all times, web access on
> the go, etc.) are present in both devices._

Generally, cheap ($30) phone's camera is awful. $200 Android phone's camera is
good. iPhone 6's camera is excellent. (Though I am using iPhone 6 Plus, I
still think iPhone 6 Plus is too expensive.)

~~~
msabalau
Given the Sony makes $20 per iPhone 6 sold for providing the cameras to Apple,
I would hope that they'd be better quality than the $30 phone!

------
quantisan
I had a ZTE Monte Carlo and used it for 3 years. It's surprisingly durable as
a device. Everything works and there're minimal physical damage after my
careless use for 3 years. Whereas my other Chinese brand phone (Umi) had more
and more problems as it wears out just 1 year after.

~~~
JonnieCache
I'm currently rocking the indestructible, inexhaustible nokia 105 (phone
flashlight ftw), but next year when I go east to seek my fortune on the
continent I've accepted that a smartphone and associated nightly charging
ritual will become essential.

What would HN recommend as a cheap, durable android device? These ZTE things
look pretty good...

Also, what happened to those ultra cheap windows mobile devices targeted at
"emerging markets?"

~~~
samsolomon
It depends how much of an upgrade you're looking for. If you want a flagship-
esque phone without the price the new $220 Moto G is an excellent pick. I
absolutely love mine—it's fast, has a good battery and is much more stylish
than other phones in the category.

The only thing keeping it back from being a flagship is the camera. Also
possibly the 5.1 screen-size. But hey, I prefer the 5" screen over the 5.5" to
6" ones, so it works for me.

EDIT: Also, Motorola has almost no bloatware on the phones. The few apps they
pre-install are actually quite good.

~~~
JonnieCache
What is a flagship? Just a really good phone?

~~~
knd775
It just means the company's primary high-end phones. For example, the iPhone 6
and Galaxy S6.

------
jhallenworld
My wife tried the Moto G 2nd generation LTE $160, but didn't like the
industrial design- too cheap. I think the first generation may have been
nicer. We ended up with the Samsung Galaxy Alpha for $275: it looks nice, but
not quite as expensive as their flagship phones:

[http://www.amazon.com/Samsung-Galaxy-G850a-Unlocked-
Cellphon...](http://www.amazon.com/Samsung-Galaxy-G850a-Unlocked-
Cellphone/dp/B00UCJ0IBU/ref=sr_1_1?s=wireless&ie=UTF8&qid=1441376187&sr=1-1&keywords=samsung+galaxy+alpha&refinements=p_36%3A18000-28000)

And yes, I think it's nuts to pay $100 for design, but happy wife happy life..

------
rsync
I have used a MOTO FONE (F3)[1] for 3+ years now. I drop it terribly all the
time.

It's very small and light and has advanced features like "redial" and "alarm
clock".

I think it's my favorite phone I've ever had.

[1]
[https://en.wikipedia.org/wiki/Motorola_Fone](https://en.wikipedia.org/wiki/Motorola_Fone)

------
ck2
ZTE makes the best $10-$20 phone I've seen anywhere.

It is called the ZTE Zinger (T-Mobile) or ZTE Prelude 2 (AT&T)

The formal model name is the Z667 or Z667T or Z667G

Goes on sale that cheap a few times a year, otherwise $40

The screen is low resolution but you'd never know, works fine for all but the
smallest text.

It is dual core and runs KitKat 4.4 so it is very smooth.

The problem is they are impossible to root and impossible to unlock
bootloader. So they never took off. ZTE basically shot themselves in the foot
and sold out to carrier desires.

It should be a crime in the USA to not be able to root your phone if you paid
for it.

------
qCOVET
This is a great example of Clay Christensen's Disruption. The cheap phone
manufacturers, will emerge as big winners in the long run and push the current
high-end manufacturers to either compete at their price point, or have their
market share shrink dramatically.

Ref: [http://www.claytonchristensen.com/key-
concepts/](http://www.claytonchristensen.com/key-concepts/)

~~~
jldugger
I don't think you actually read that book. Disruptive innovation is moving a
technology designed for one market, possibly a new one, into another existing
market. Existing market participants focus on 'sustaining' innovations like
reducing costs and inventing more expensive products. In today's environment,
think using ARM processors, intentionally designed for low power draw in
mobile phones, into laptops, desktops and eventually servers.

ZTE's success is just price differentiation within an existing market. Their
'innovation' is selling phone technology from 2 years ago at a discount. I
don't think that even counts as a sustaining innovation, and the article notes
that sales doubled but profits growing only 4 percent-- this implies huge cuts
to profit margins. The same article also notes that this 'reduced margins'
strategy might be subsidized by Chinese security interests.

~~~
qCOVET
From the author - Clay Christensen himself:

"Consider the hegemony of Detroit’s Big Three—General Motors, Ford, and
Chrysler. At one time, they dominated the auto industry, producing bigger,
faster, safer, more comfortable cars with more and more features. But these
improving products also “create a vacuum underneath them,” Christensen says,
“and disruptive innovators suck customers in with fewer features and a cheaper
price.” Toyota, Honda, and Nissan disrupted the Big Three’s marketplace by
introducing smaller, lighter, less safe, and less comfortable but reliable
cars that needed few repairs and got good gas mileage—at a significantly lower
price. Within a few years, they had garnered a large share of the market. Says
Christensen: “The leaders get killed from below.”

A Toyota car, is a Toyota car that was designed to be a car..it was not
designed for some other purpose and re-purposed for transportation.

Reference: [http://harvardmagazine.com/2014/07/disruptive-
genius](http://harvardmagazine.com/2014/07/disruptive-genius)

~~~
jldugger
> A Toyota car, is a Toyota car that was designed to be a car..it was not
> designed for some other purpose and re-purposed for transportation.

This explanation works cross purposes with his actual book, which uses the
example of Honda, Kawasaki, and Yamaha vs Harley-Davidson and BMW. The
Japanese offroad bikes are very precisely not designed for street driving, and
were repurposed. It also covers backhoes vs diggers, and how people now use
backhoes even for normal digging jobs. And hard drive minification. I lent out
my copy to our marketing intern, or I'd pull quotes.

It also disagrees with his own quote: "Sustaining innovation makes good
products better—but then you don’t buy the old product. They’re replacements.
They do not create growth." Honda didn't just take a Ford Falcon design from 5
years ago and sell it at a steep discount. They had designs suitable for the
Japanese market, that suddenly became popular when the oil embargo hit in
'73\. Because Civics were a substantially different car, the Big 3 couldn't
just pull their old designs off the shelves, and it's not like the market for
the Big 3's used cars took off.

ZTE phones are essentially phones from 2 years ago, at market clearing (lower)
price. You don't need to reach for disruptive vs sustaining innovation to
explain why ZTE is gaining marketshare when simple supply & demand curves will
do the trick. AFAICT, the only innovation on display here is making less
profits.

------
dharma1
I expect there won't be many other than the top Chinese brands left in a few
years. Price/spec ratio is unbeatable

~~~
adestefan
At one point in time people said this about Japanese electronic vendors. Most
of those companies are now dead.

You can point at the Japanese automakers as a counter-point. However, I
caution that comparison because they rallied around quality. In the early-70s
the major American automobile makers were both terrible quality and expensive.
The Japanese were able to create the holy union of both a more reliable and
cheaper automobile.

Could a Chinese market sprout up to make quality and cheap phone? Probably,
but there's no real issue of all the phones are expensive, but terrible
devices.

~~~
dharma1
In the long run, yes, when 3D printing and robotics makes manufacturing viable
anywhere again. In the short term, iPhone and chinese android brands will rule

------
cpursley
The moto e is the best 'cheap phone' and service in the United States:
[https://republicwireless.com/phones/](https://republicwireless.com/phones/)

The phone is absolutely sufficient and you can't beat the plan.

------
raverbashing
Hard to justify the increased iPhone prices (and I'm a Mac user)

Especially when you prefer to buy unlocked phones

~~~
tdkl
Personally, I don't see the price difference just in hardware or
functionality, but in software and support.

When I buy a premium iPhone device, I pay for future years of security updates
and optimizations. I also pay for kind, instant support online or in a network
of certified resellers or Apple stores (if I'm lucky to be near one at least
in EU).

Some people like to tinker with their devices or even have to from time to
time when an app/service goes amok. I pay extra to not deal with that, because
my time is worth more, then wasting it on things like that.

Now compare that to a sub 100$/€ phone.

------
superuser2
For $60 I'd much rather have a 2003-vintage Nokia. The battery would last for
weeks. Only thing is I can't live without Google Maps anymore.

------
pingec
Are they running a non-Google version of Android? Because in these market
share charts what I really see is just Google vs. Apple

~~~
eitally
As an app developer, that may make sense, but I don't think consumers see it
that way at all. Perhaps that will change in the future, but the skins applied
by HTC & Samsung, especially (Sony's & LG's aren't too overdone) make the UX
completely different between brands, even if the underlying OS is the same.
Add in the ability to use custom launchers and you very easily could end up
with someone customizing their Android phone to the point where only they know
how to use it.

~~~
ourmandave
I've been an Android user since forever but HTC's interface kept nagging me to
configure the _HTC Experience_ after every little update, even though I'd
dismissed it over and over.

It's like that pop-up wondering if you'd like to take a survey while you're
entering your shipping address during check out.

It finally drove me to a cheap Windows phone.

~~~
TsiCClawOfLight
Just get a Nexus or Sony. Vanilla Android is a much better experience. (or
flash cyanogen)

~~~
paulgb
Sony's experience (at least the Xperia Z3) is far from vanilla and not in a
good way. They replace pretty much every app and UI component with an inferior
in-house version, and add a bunch of unremovable apps to try to sell you Sony
stuff.

I hear the Z5 is better though so hopefully they're getting the message.

~~~
dang
Boy do you have that right. I love how small that phone is and the hardware is
good in general, but everything they've done with the software is
cringeworthy. What are the options for wiping it completely?

------
imissmyjuno
i really want a Firefox OS ZTE but it seems impossible to obtain in Canada
through any of the carriers.

------
jsf666
Selling phones with plans for a subsidized (when someone can't count the total
cost) is one of the biggest multi-billion dolar "scams" I've seen for a while.
Here (Europe) buying a pre-paid card and a phone separatly is the most cost
effective option, isn't it the same in the States?

~~~
meesles
It would depend on your use I suppose? I always found that I could never live
off a prepaid system because I would blow through the data too fast.

~~~
DanBC
Giffgaff offer unlimited phone data (no tethering) for £15 per month.

~~~
IkmoIkmo
Which one?

[https://www.giffgaff.com/goodybags/15pound-
goodybag](https://www.giffgaff.com/goodybags/15pound-goodybag)

Can only find that, 15 pound plan by giffgaff, 4gb limit on data and a 10p
charge per minute for calling UK landlines.

Then there's their 'always on' which isn't unlimited, it's 6gb which to me is
practically unlimited. After the 6gb your speeds get reduced to a fraction
(which I like, and up to 6gb you can tether btw).

But if you look at the phone+plan deals giffgaff has, they're all slightly
cheaper per month and with the phone included there's no upfront costs and
it's still cheaper than buying the phone separately.

It does make sense of course if you can find a new-quality, second-hand phone,
at a second-hand price, or if you travel so much that any plan no matter the
pricing really makes little sense in the first place.

