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Amazing what 50 bucks can buy. Are smartphone manufacturers really as naive as the story suggests, churning out phones at a loss in the vain hope of future pro

by drb311 11y ago

Amazing what 50 bucks can buy. Are smartphone manufacturers really as naive as the story suggests, churning out phones at a loss in the vain hope of future profit? I know they're in trouble but they're not THAT deluded, are they?

tdkl 11y ago
The one who makes most of the profit in this case is Google, be it Play Store revenue, or data collected. I'm actually beginning to feel bad for the Android vendors.
- aikah 11y ago
  > The one who makes most of the profit in this case is Google And Microsoft do who basically gets money on every Samsung and HTC Android device because patents. And let's wait the conclusion of Google vs Oracle case, it might be a game changer. If Oracle wins , it won't be so easy anymore for Google.
  - lgleason 11y ago
    I really hope that the Oracle VS Google thing might encourage Google to release a new official language for Android that is not Java.
    - joshuapants 11y ago
      I'm surprised Google hasn't made a bigger push with Go on Android. It seems like there's some rudimentary support, so maybe it's on the way.
- jorgecastillo 11y ago
  >I'm actually beginning to feel bad for the Android vendors. I don't, I think I paid a fair price for my smartphone (LG-D280f) considering all the crap it comes bundle with (which I can't uninstall) and that I'll never get operating system updates. Even so I still like LG smartphones. I even recommend this brand!
- ValentineC 11y ago
  I'm curious how many owners of these sub-$50 phones actually go on to purchase stuff on the Play Store.
phpnode 11y ago
I was extremely surprised to see LG's profit margin being as low as 1.2c per device. That would be a poor profit margin for a chocolate bar, let alone a smartphone. That is obviously not sustainable.
- joshuapants 11y ago
  Margins in consumer electronics are typically razor thin, particularly when the device in question is a commodity (mid-tier Android phones, for example). 1.2c is obviously unsustainable, as you mention. I wonder if they got blindsided by a price increase on some part.
  - johnchristopher 11y ago
    How can these be razor thin and 1.2c when a trip to the local shops and the internet shows variations in the 10€ range for the same models ?
    - joshuapants 11y ago
      Because the price the store charges you is not the price the manufacturer charges the store.
    - Avshalom 11y ago
      It costs LG $10, they sell it to Best-WalGet for $10.012. the price range you see is depending on how much it gets marked up for retail.
olefoo 11y ago
These phones use parts and designs that have already been paid for, and they are produced in a competitive market. So it's not surprising that the unit cost to the consumer approaches the cost of production. Once the BOM gets down into the low teens ( USD ) selling them at $50 is not unreasonable. It's not a glamorous high margin business like Apple; it's a low-margin high volume business like Walmart. I wonder what sorts of social networks they will enable?

by drb311 11y ago

tdkl 11y ago

The one who makes most of the profit in this case is Google, be it Play Store revenue, or data collected. I'm actually beginning to feel bad for the Android vendors.

aikah 11y ago
> The one who makes most of the profit in this case is Google And Microsoft do who basically gets money on every Samsung and HTC Android device because patents. And let's wait the conclusion of Google vs Oracle case, it might be a game changer. If Oracle wins , it won't be so easy anymore for Google.
- lgleason 11y ago
  I really hope that the Oracle VS Google thing might encourage Google to release a new official language for Android that is not Java.
  - joshuapants 11y ago
    I'm surprised Google hasn't made a bigger push with Go on Android. It seems like there's some rudimentary support, so maybe it's on the way.
jorgecastillo 11y ago
>I'm actually beginning to feel bad for the Android vendors. I don't, I think I paid a fair price for my smartphone (LG-D280f) considering all the crap it comes bundle with (which I can't uninstall) and that I'll never get operating system updates. Even so I still like LG smartphones. I even recommend this brand!
ValentineC 11y ago
I'm curious how many owners of these sub-$50 phones actually go on to purchase stuff on the Play Store.

phpnode 11y ago

I was extremely surprised to see LG's profit margin being as low as 1.2c per device. That would be a poor profit margin for a chocolate bar, let alone a smartphone. That is obviously not sustainable.

joshuapants 11y ago
Margins in consumer electronics are typically razor thin, particularly when the device in question is a commodity (mid-tier Android phones, for example). 1.2c is obviously unsustainable, as you mention. I wonder if they got blindsided by a price increase on some part.
- johnchristopher 11y ago
  How can these be razor thin and 1.2c when a trip to the local shops and the internet shows variations in the 10€ range for the same models ?
  - joshuapants 11y ago
    Because the price the store charges you is not the price the manufacturer charges the store.
  - Avshalom 11y ago
    It costs LG $10, they sell it to Best-WalGet for $10.012. the price range you see is depending on how much it gets marked up for retail.

olefoo 11y ago

These phones use parts and designs that have already been paid for, and they are produced in a competitive market. So it's not surprising that the unit cost to the consumer approaches the cost of production. Once the BOM gets down into the low teens ( USD ) selling them at $50 is not unreasonable. It's not a glamorous high margin business like Apple; it's a low-margin high volume business like Walmart. I wonder what sorts of social networks they will enable?