
The $85 Smartphone and the imminent extinction of non-smartphones - barredo
http://www.asymco.com/2010/12/27/the-85-smartphone/
======
Zev
Just because smartphones have a higher profit margin for companies, doesn't
automatically mean that consumers will buy a smartphone, let alone will want
one.

Non-smartphones aren't going anywhere. Not until smartphones are given away
for free and you can pick one up without being forced to add a data plan.

~~~
lukeschlather
I got my first cell phone in 2008 as a junior in college, recognizing that it
was getting to be too difficult looking for internships relying on my
landline. I didn't want anything fancy, so I just got the phone that came
"free" with the plan. That phone had a camera and a basic Internet browser.

Based on that, I'm pretty sure we'll be seeing smartphones offered at roughly
the same subsidized price point as a dumbphone by 2012, and I'd actually call
that a pretty conservative estimate; they could definitely show up in the
first half of 2011. Giving someone a $100-200 phone with a 100mb data cap is
nothing, provided you can upsell a reasonable number of them to a 1GB data cap
by the end of their contract.

I could also see data/text-only phones showing up with 250MB-1GB caps in the
near future, possibly rolled in with some VOIP app that bills voice as data.
(It's an accident of a minimally competitive marketplace with minimal
regulation that we haven't seen these already.)

~~~
evilduck
I've had a smartphone for about 4 years. I don't watch YouTube or stream
Pandora daily, but it's my primary means of checking my email, and I browse
websites on it daily, along with sending and receiving pictures every now and
then.

I average about 200-300mb/mo. If I could get a significantly cheaper rate in
exchange for a 1gb cap, I'd probably do it.

------
cletus
This is really an obvious non-story. Smart phones came into existence because
they became possible with the (currently) relentless march of Moore's Law.
That same law and increasing demand is predictably driving down costs. Shock,
horror.

As for those bemoaning the demise of feature phones, that too is inevitable.
It suits the usage pattern of some. Also cheap phones will live for a long
time due to markets in developing countries where price is a more important
factor.

Also for those saying the data plans and service costs are a barrier: the US
is a mobile backwater (compared to any other OECD nation). Service is woeful,
costs are ludicrous... It's simply ridiculous. Being charged for receiving
calls? Receiving SMSs?!? Huge data costs. Lack of data Goering (eg a small
woeful 100-200mb plan and then an unlimited or 2-5gb plan with a huge step up
and nothing in between).

In the US you're paying realistically $60/month minimum (more if you want to
tether!). In Australia I'd pay as little as half that for superior coverage
and service quality. In Asia it'd probably be even less.

I expect in the developed world dmartphones will outsell feature phones within
3 years.

~~~
joshd
In Auastralia the plan I've just moved to
(<http://www.tpg.com.au/mobile/plans.html>) gives me enough calls, text and
data for $15 a month without any lock in.

I've been looking into US contracts in preperation for a move and was shocked
at the rates people are willing to pay.

------
rospaya
This reminds me about the death of SMS. MMS had multimedia attachments, it was
practical and powerful. But analysts forgot that one was for sending pictures
and the other for text, and that one isn't replaceable by the other.

The same thing with non-smartphones (dumb-phones, feature-phones, whatever you
want to call them). They fill a purpouse for a lot of people. Not only in
developing countries, but with people that don't need a smart OS.

To be fair, outside of apps, most dumbphones can do a lot of things a
smartphone can, but people don't know or don't want to use those features.

------
trotsky
As pointed out in the comments, Virgin Mobile's (sprint mvno) Android offering
is more or less doing this already. The Samsung Intercept is a mid range
android 2.1 offering that's going for as low as $175 or so with no contract
($250 MSRP). More notable is their new rate plan - $25/mo for "unlimited"
data/texts/300 minutes with no contract... compare that to $60-$70/mo for the
same service from Sprint (on the same network).

It's not for everybody, but it's a very visible sign that there is a lot of
air left to be let out of high end mobile.

------
pxlpshr
2012 is a little early but I think touch-displays and mobile OSs will be a
technology leap in countries where a majority of people have not been accustom
to traditional computing environments, mouse/keyboard interfaces, etc.
Smartphones and tablets are destined to be the $100 laptop in underserved
countries. I hope Google and Apple make charitable donations in a few years
when hardware costs drop. They'll be great for education.

~~~
riledhel
it's not just for "underserved countries"; they're so good at what they do
that they'll be everywhere. Economies of scale will do their magic. So if
Google or Apple don't fill that spot, someone else will with cheap enough
devices.

------
iworkforthem
I dun quite agree with the whole imminent extinction of non-smartphones, I
think they will still coexist, with smartphone market share increasing
gradually.

\- Most part of the world are still fairly not developed to support the data
requirements of smartphones, especially in Africa and Asia.

\- There is still a need for non-camera/non-storage/non-smartphone in certain
defense/government related jobs.

\- A large part of the population is over 35 ages of years, most of them uses
a non-smartphone, they use the phone just to make calls most of the time.

~~~
martey
* Smartphones do not have "data requirements." They still work on 2G networks, just slower. While many areas of the developing world still do not have significant cellular coverage (compared to Europe and North America), some providers are already rolling out WiMAX and LTE.

* Most of the population in developed countries, much less the world, do not work in jobs that require their phones to not have cameras.

* Do older people not have smartphones because they do not want/need them, or because of the perception that it cost too much?

I think the point of the article is that as smartphones begin to cost the same
as regular phones, we will see a dramatic rise in adoption.

~~~
iworkforthem
I have my doubts if smartphones can ever cost the same as regular phones. Like
@ams6110 said smartphones come cheaper only after it is contracted with a 2
yrs data plan, cause this would only make $$$ sense for both the carrier and
the manufacturer.

ps: I own a iPhone 4 which come heavily subsidized with a 2 yr data plan and a
$35 non-smartphone which I bought, without any long term contract.

Also, another issue with smartphone is the battery life. They drain out really
fast, finding a charger recharge a mobile twice a day just dun make sense in
quite a lot of places in the world.

Till these issues are resolved, and unless countries are willingly to upgrade
of their telecommunication infrastructure, my guess is that smartphones and
non-smartphones are likely to coexist for a quite number of years. Sure,
developed countries will continue to upgrade to something like Japan and South
Korea.

~~~
evilduck
>I have my doubts if smartphones can ever cost the same as regular phones.

The contract freebie "dumbphones" today are better than the $300 phones from 5
years ago. The oldschool Nokia candybars that placed calls and played Snake
aren't even carried in stores anymore. Current smartphones may not dominate in
the next two years, but at some point, carriers will just stop offering the
current crop of dumbphones and the freebies will provide feature parity with
current smartphones.

------
earl
Am I the only person who loves my dumb phone?

For starters, it just works. A good friend has a Motorola Droid X. Android is
a useless piece of shit -- his _alarm clock_ keeps crashing with NPEs. This
was one of the premier android phones when he bought it, and he left it
completely stock. I, along with many friends of my generation, use our phones
as our alarm clock and watch, so this is obviously pretty useless.

Second, my three year old motorola krzr is robust. It's been face down in my
pants pocket while sliding down 500 feet of ice when I wiped out on some
really icy moguls last year. That shattered the front. It's survived prolly
100+ impacts in my coat while snowboarding, though none as brutal as the
above. The paint is peeling off the entire back. It's dented, prolly from a
different fall snowboarding. It fell out of my coat pocket and hung out in the
snow for 8 hours next to our car last year whence I fortunately saw it before
driving off. Through all of it, it still makes / receives calls and makes /
receives texts. I'm pretty sure I'd kill a smartphone inside 5 snowboarding
days, tops. I still get 30 hours of standby battery life, though I'll probably
have to replace the battery soon. My friends w/ iphones and the like seem to
rush between charges, and last weekend at the ski house, there was a rush to
find the one person who brought an iphone charger. I didn't charge all
weekend.

tl;dr -- dumb phones are robust, have great battery life, and generally work
well at their limited functionality

~~~
Raphael
It's pretty clear that smartphones aren't primarily for placing calls. They're
pocket computers with cellular internet access.

~~~
iwwr
They're premium walled gardens with puny bandwidth. If only operators really
treated them like mobile computers and not walking cash registers...

~~~
tincholio
You should move to Europe (well, one of the nordic countries anyway), dude...
I have unlimited HSPA access which costs something like 15Eur/month, and the
bandwidth you get is most definitely not puny.

------
anonymous246
Pink elephant in the room: data plan charges.

I would _love_ to buy an iPod Touch that works as dumb cellphone since it will
save me the hassle of carrying two devices. Puzzling why there is no such
device from the biggies.

~~~
halo
Since Android 2.2 you can disable packet data and only use Wi-Fi for Internet
access.

~~~
anonymous246
Can I buy a device which does this and also does cell network vioce calls for
around the price of an iPod Touch? Also can I get this device without having
to pay mandatory data charges?

~~~
halo
Assuming you're in the US (by your usage of 'cell phone' and 'data plan'), I
have no idea. I'm in the UK, and got a Samsung Galaxy S for free on an £20
18mo contract without data.

~~~
Ras_
In Finland Galaxy S was free with 16,90€ 24mo contract with 384kbit/s non-
capped data.

We probably have the smallest operator margins (and/or most network
overcapacity) in the EU. The US mobile communication prices seem unbelievable,
esp. when everything related to tech is usually considerably more expensive
here.

~~~
anonymous246
Thanks; I appreciate the new info.

------
iphoneedbot
Remember Open Moko?

<http://wiki.openmoko.org/wiki/Main_Page>
<http://wiki.openmoko.org/wiki/Neo_FreeRunner>

What -ever happened with that? or the dream of ULTRA CHEAP laptops?

------
iphoneedbot
Wait.. with Android in the mix, I thought it was suppose to contribute to
lowering smart phone prices? But, it appears that companies are just pocketing
the difference and not passing along the cost savings

