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Why do profit-seeking companies keep making profitless Android phones?

68 points by antr 11y ago

joefarish 11y ago
The mobile market is going to continue to grow for the foreseeable future. Getting in on the ground floor and "breaking-even" whilst getting a foothold in the market and building customer loyalty doesn't seem like a bad idea.
- 4ec327 11y ago
  Agree with the idea of getting a foot in the door, but I don't think Android phone owners are very loyal.
  - Klathmon 11y ago
    I completely disagree. My father in law won't buy anything else other than the Samsung Galaxy S series. To him it's not even android, it's a "Galaxy".
    - icebraining 11y ago
      Yeah, but the Galaxy is a line that avoided the fate that's being reported. The question is: do people have that attachment to cheap HTC and LG phones?
      - vilmosi 11y ago
        People are easier convinced to upgrade to a slightly better HTC/LG in the future, because "it's the same phone, but better". I understand the strategy.
      - Klathmon 11y ago
        That is a good point... I have an attachment to the Nexus series, but again that's obviously not in the same "tier" as the cheap HTC, LG, and even some bottom-of-the-line samsungs.
    - dingo_bat 11y ago
      You cannot lump galaxy phones wroth the other Android phones because it is the only range that makes money for its parent.
- conceit 11y ago
  I always assumed they went the big data way, seeing most are wannabe Apple copies using Google's android, to mine their customers for valuable data.
- a_c_s 11y ago
  How'd that work for pc makers? Their profit margins have shrunk from low to near-zero (>2.5%)[1] This is in contrast to Apple who has had healthy margins and have consistently improved market share nearly the last decade.[2] In the electronics business, unless you are significantly differentiated there there isn't much customer loyalty to be had. [1]http://www.theguardian.com/technology/2014/jan/09/pc-value-trap-windows-chrome-hp-dell-lenovo-asus-acer http://www.theguardian.com/technology/2014/jan/09/pc-value-t... [2]http://recode.net/2014/11/06/mac-hits-market-share-milestone-in-u-s-what-post-pc-era/ http://recode.net/2014/11/06/mac-hits-market-share-milestone...
  - deleted 11y ago
    [deleted]
dovdov 11y ago
Like nobody would pay someone money to put a tapping device into your pocket. ;)
amolgupta 11y ago
How long has this post been in the draft? Samsung's position is no more as great as it suggests.
- vlehto 11y ago
  How so?
- exelius 11y ago
  Samsung's position isn't great; but it's definitely better than LG, HTC or Motorola. Samsung's mobile division is at least profitable; which can't be said for anyone else.
- piquadrat 11y ago
  Also, no mention of Huawei, which is now in 3rd place in phones sold, and catching up with the two top dogs fast. http://fortune.com/2015/10/28/smartphones-huawei-idc/ http://fortune.com/2015/10/28/smartphones-huawei-idc/
PaulHoule 11y ago
Stock Android is likely to be better than anything oems will modify it to be.
- creshal 11y ago
  Sadly, no OEM seems to understand that. Every single of their UIs either has a horrible UX, or is much slower than stock Android, or crashes, or all three. Urgh, why aren't there any modern 4/4.5" Nexus phones. :(
  - gleenn 11y ago
    I used to buy this theory for a long time until I got my Nexus 5x. It has a lot of bugs. I actually miss the very polished feel of my Sony Z3 compact. Low ui tweaks, super dependable. It's a shame I hear Sony might be stopping its phone line, or maybe that's just a rumor.
    - davidwparker 11y ago
      Care to share what bugs you have / had on your 5x? I've had my 5x for months and only come across a couple of bugs, a couple of times- but they happened once and weren't reproducible.
      - gleenn 11y ago
        - I also regularly have to kill apps and restart them because they don't properly detect internet connectivity. I think this is actually due to people not testing apps against the new Doze functionality, which isn't Google's fault but definitely isn't the greatest user experience. - The camera software/drivers are really slow and crash regularly. - I get random spinners on videos that don't go away sometimes.
  - alimbada 11y ago
    Nexus devices aren't immune from this. I had a Galaxy Nexus. I'm now an iPhone user.
DominikR 11y ago
Well, when I look at younger people (18-24) I often see a pattern of users that don't own a PC and most of the time don't even own a laptop. They use smartphones and sometimes tablets for most tasks. That might change once they get older, but maybe it wont. So I think it's a good idea for any company that was/is in the PC/laptop business to try and capture as much mobile computing marketshare as possible.
- tempodox 11y ago
  I use a tablet and a desktop computer besides my mobile phone and even for me, there is a noticeable gravitational pull towards “mobile computing”. While a dedicated screen and keyboard are clearly ergonomically superior, I just love the fact that I can hook a Bluetooth keyboard to my squawk box and make it a mobile remote terminal. All that's missing is infrastructure to log into your “home” (whatever that is) securely and with your privacy intact.
  - solnyshok 11y ago
    can you elaborate on the "home" part of this? do you have a 24x7 box at home? then openvpn solves secure access part. or, did you mean the lack "needed but not existing yet home control hub for lights, heating, fridge, music, surveillance, etc."?
- maxerickson 11y ago
  I think for casual users of any age, having a desktop at all has become atypical.
- vilmosi 11y ago
  Younger people. As in unemployed or McJobs. They never had a PC. For students, gamers and young professionals, they all have a PC.
  - DominikR 11y ago
    This is simply not true. I know many students that don't have a PC, only a laptop at most that is almost never used. (only to write papers) Those students are not studying anything tech related. (Psychology and stuff like that) And doing mundane tech related tasks only with a smartphone is not as bad or awkward as one would imagine. For example for scanning documents I use my PC (built out of components I picked myself) that dual boots into Windows 7 / Mac OSX (Hackintosh - lots of fiddling around with drivers) that is connected to a scanner via network cable. (which often does not work without restarting the scanner) My girlfriend uses a non modified out of the box iPhone and does the same thing with much less effort (if you count the time I invested in my setup and keeping it running) with an app that uses the phones camera to "scan" documents. I was completely baffled when I first saw that. She doesn't have to care about setting up the OS (okay, you can buy a PC with preinstalled OS), dealing with updates and drivers, downloading and manually installing software from some website and managing storage. I'm pretty sure she wouldn't even need a laptop if she had a quality tablet with a good bluetooth keyboard.
grabcocque 11y ago
The sunk cost fallacy, basically. That or Stockholm syndrome.
homarp 11y ago
Maybe they should try to be different, instead of being iPhone clones. Every one I know have a super slim phone, then a case to prevent it to be broken and make the phone not slim anymore and then a second battery. So why not make a less slim phone with hardened chassis and a longer battery ? And market it as such (you want slim that last 8h and you can't plug your earphones, go Apple, you want solid that last 2 days and you can plug your earphones, buy Me) And they also should embrace XDA community who work for free in advocating "a phone". And they should also accept that a premium 4.5 /4.8 screen phone is also in demand, not just 5.5 and 6.0. And give removable battery so we, paranoid, can really unplug the phone without having to put in the fridge.
- dorfsmay 11y ago
  There are such models, the One Plus One is an example.
  - lorenzhs 11y ago
    I own one and the OnePlus One has its own set of problems. Maybe most annoyingly, the touch screen doesn't work in warm weather. It also took them months to fix very basic functionality (the touch screen had ghost touch issues for a great deal of people in the beginning). Support barely exists (I don't know if they managed to improve on that by now). Also CyanogenOS is getting more and more annoying, with tons of crapware being bundled (a weird dialler, Cortana) and even ads (the "open with" intent chooser has suggestions to install Microsoft apps for certain file types). Oh and it frequently doesn't play well with Google Play Services. There's an awful lot of battery drain because Play Services doesn't seem to like some of the modifications they made. Currently mine loses some 30% of charge overnight in airplane mode.
- zanny 11y ago
  Of maybe a phone that respected user privacy. Even if you couldn't open source the modem firmware due to the FCC, you could at least put it behind a IOMMU rather than having it as half the SoC with the power to take control of perpiherals and read memory whenever it wants, independently of what the CPU is doing. Just give me something 5", with a big battery, big frame - as you describe - 1080p, I don't care about the display war, decent storage, usb-c, an sd card slot, and a camera that is alright and it is an instant purchase for myself and everybody whose tech purchasing I influence if it is FSF certified.
venomsnake 11y ago
One of the things the article fails to mention is that both LG and Sony make damn fine devices (and superior to the Samsungs). Z compact series is the only small first class smartphone. Why Apple succeeded? Because they did not allowed the carriers to interfere with their software and updates. Why all of those companies are in that position - because they did (honorable mention for WP7,7.5,8 and 10).
- stevetrewick 11y ago
  Definitely helps. Apple probably learned this from watching what happened with the most popular pre iPhone smartphone OS, Windows Mobile/CE. Good (for its time) OS ruined by OEMs and carriers.
- DominikR 11y ago
  I fully agree, but I also doubt that Sony or LG are able to create a good enough OS for the consumer market. (I cringe when I think about the Smart TV OS they use on their TVs) Apple can build, own and control every part of their hardware/software. Google could probably too, but they chose a different path to distribute their OS. Edit: I don't mean to say that Sony or LG engineers are not great, it's just that you need to have experience with this type of product to build something that is really great. Sony and LG always built their own software but not on that level as their focus was always more on the hardware side.
  - konceptz 11y ago
    I believe that one of the tv systems (forgot who) is webos, a very fine mobile platform from what I recall. Purchased and reimplemented by (un)said manufacturer.
  - venomsnake 11y ago
    >I fully agree, but I also doubt that Sony or LG are able to create a good enough OS for the consumer market. (I cringe when I think about the Smart TV OS they use on their TVs) They don't need to. Stock android is stellar since 4.2. Just make the hardware and get out of the way.
- 11y ago
tempodox 11y ago
> Android ... is a first-class mobile OS While I wouldn't deny that, as an app platform it doesn't hold a candle to iOS.
- rhodysurf 11y ago
  In what respect?
  - motoboi 11y ago
    I think this used to be true because Android phones had worst hardware and Android versions market share were too fragmented. We still have a majority of cheap android phones on the market (think outside the US), but Google is making a good advance in bringing new APIs to old versions.
  - tempodox 11y ago
    I guess iOS is more geared towards devs who have been building desktop apps while Android seems to be more approachable if you come from building web apps. There are corners in Android where “persistent state” seems to become a problem, even affecting UI. I'm sure one could expand the discussion, but let this suffice.
- tempodox 11y ago
  I realise that saying anything ever-so-slightly non-fanboyish about Android is an irresistible licence to downvote, but really: can you try to behave less pavlovian?
ocdtrekkie 11y ago
Well, Google's making bank on it. $31 billion. It seems like OEMs are burdened with most of the work and the costs of support and liability and update distribution (even if a software bug is Google's doing), yet Google gets to rake in the cash.
- discreditable 11y ago
  OEM's update woes are their own doing. The further they get from AOSP the more painful it is to hack updates together.
  - ocdtrekkie 11y ago
    That's kinda false on multiple fronts. First and foremost: From everything I've heard Google doesn't go out of their way to support any hardware besides Nexus devices, so if you use any different chips, you have to do your own work to get it to work. Also, Google often ships Android versions non-compliant with carrier requirements. I remember when the last Nexus 7 rolled out, it's radios were compatible with Verizon, but they couldn't meet Verizon's standards for certification until a later patch level of Android. OEMs often have to bear the burden of making Android actually work on a carrier. And finally, the further they get from proprietary Google Android (it's not AOSP if it has Google Apps), the more likely they solve the 'lack of profit' problem. Google saps up all of the potential revenue streams for a manufacturer with it's various apps and services that OEMs are forced to install. Many of their own apps and customizations offer them additional potential for income.
a2tech 11y ago
Its the Dell problem-they think if they cut the margins to the bleeding edge they'll make it up in volume. Just like Dell though they all find its a tricky edge to walk. Playing the volume game means you're one bad quarter from your phone division tanking.
mojuba 11y ago
Free or ultra-cheap phones with ads anyone?
- ck2 11y ago
  You don't need ads when they can carrier lock like tracfone/net10/straightalk does (all same company). But you now can get free service with ad supported networks like RingPlus
bobajeff 11y ago
This article comes at a time when I'm looking for a new phone but nothing looks good to me. Not even the iPhone. They don't want to make phones a small as I like and they refuse to make true standalone smartwatches that can make and receive calls/texts and use GPS by themselves.
- roymurdock 11y ago
  If you're looking for a smartphone, I still recommend the iPhone 5/5s - the form factor is perfect, the price point is good, and the hardware should be new enough to handle anything you might want to throw at it for the next 2 years. My iPhone 5 is reaching the end of its life...I'm planning on getting a dumb phone next with a ton of battery life, a decent camera, and a nice keyboard.
  - endemic 11y ago
    Or the rumored new 4" iPhone.
- maxerickson 11y ago
  It expects you to use a phone to manage it, but the Gear S is a phone in its own right: http://www.samsung.com/us/explore/gear-s-features-and-specs/ http://www.samsung.com/us/explore/gear-s-features-and-specs/ LG almost brought a 4G one to market last fall but pulled it at the last minute.
- downtide 11y ago
  I think it's an inherent usablity issue. The two functions I'd like from a smart phone (other than calls and SMS), is mapping and the odd web lookup. I've currently got a Blackberry as a hand me down with the old form factor: half screen, half keyboard. Personally the keyboard is too much of a nuisance for me, and most websites just don't work that well on it. To the point, I'll only use it, if I really have to. So most of the time, I have an oversized item in my pocket, that I don't really care for, that runs out of battery quickly, and makes me curse daily. A classic old phone (small nokia form factor) with WAP style browsing would actually suit me more. But actually I think it's more a matter of coming up with a user interface that can work with a small screen. Pure text isn't that bad.
roymurdock 11y ago
Article gives 3 main reasons why companies such as Samsung, LG, Sony, and HTC continue to make smartphones (and lose money w/ the exception of Samsung): 1. every new smartphone bearing the company’s insignia serves as an engineering showcase for the various component businesses that comprise its vast conglomerate 2. LG believes it needs a smartphone to connect to its growing ecosystem of smart home, TV, and in-car gadgets, plus phones provide free and ubiquitous advertising 3. Others see smartphones as a conduit to generating profits elsewhere. Xiaomi is famous for selling phones at cost and then seeking to capitalize on a well-disposed user base by selling additional services and extras like luggage. Of these 3, the only one that makes financial sense to me is 2. For companies that are so heavily invested in connected white goods and home automation, selling a smartphone that can control a home hub at cost is akin to giving away a free remote control for a TV. It helps bring users into the ecosystem and can help guide their fridge, TV, security network, etc. purchasing decisions.
inthewoods 11y ago
I've never understood why OEMs think there is value in altering Android. As far as I can tell, it just gives them higher costs in exchange for some vague perception of additional value in terms of the customer value. It would seem more logical to me for OEMs to say "screw it, let's just make the best hardware" and minimize their software development costs which they are paying to Google. I would have thought another lesson from Windows is that bloatware is hated and doesn't improve anything - although in the Windows world, the PC makers likely made money by including the bloatware on their machines. Of course, none of this would solve the update issue as far as I can tell because the carriers are always involved in checking updates. Obviously, Apple bypasses this issue - but my question is why does it still exist for other phones? Carriers always say they need to check the phones - but why? And if so, why don't they need to check iPhone updates? My cynical assumption is that carriers want control and they add actually zero value but do this to maintain control.
- rst 11y ago
  Early Android native UIs were rough enough that manufacturer skins were arguably real improvements. That case has gotten a lot weaker since the Google mothership started getting serious about design.
  - frik 11y ago
    Exactly. While Android 1.x looked more like Win95/WinCE, and Android 2x still had some rough edges. Samsung TouchWiz UI for Android 2 made it look modern and very similar to what Android 3/4 looked like.
    - inthewoods 11y ago
      Good point - agreed - but now these OEMs seem convinced that they are actually adding value. Sunken cost fallacy I suppose.
- ignoramous 11y ago
  Much of the customization stem from fixing android's perceived shortcomings by the product-management at respective OEMs. Besides, you must realise that Google doesn't engage OEMs as much as it should when it decides what goes and what doesn't AFAIK, Google does it own prod-mgmt. Android isn't a standard. Which is a good thing, 'cause it can move fast and break things (which it often does). For instance, Amazon saw that the WebView was tightly tied with Android and that was security concern (up until it was freed in Android L), and so Amazon made it OTA'able in its third iteration of Fire OS (Android K). Also, in a crowded market, you need a differentiator. If every phone is going to look and do the same thing, why would anyone buy one device over another? Samsung needs to market things with its offering, it can't just do so with Hardware. It needs the stylus to justify the exorbitant price tag on its Galaxy Note line of products. It needs floating activities on its mega-screen and wants people to get hooked on to that feature, to an extent that they can no longer do without it, which makes sure they'd buy and recommend Samsung over other OEMs. Secondly, hardware is just one part of the equation. Sometimes you require vast changes in Software to make sure the hardware is properly utilized... Or you just have a better Software solution up your sleeve than what Google gave you. Thirdly, some of the Google Apps aren't stellar-- Photos is miserable, Camera is a-okay, Music Player is a-okay, Video Player is miserable, Launcher isn't smart, Lockscreen isn't smart. You need premium apps for your devices. Besides, why would you want Google to walk away with the cake (usage information generated using all those apps) from a customer you acquired with all those hours you spent marketing the phone, establishing your brand, figuring out the quirks of doing businesses globally, toiling endlessly to sort out the logistics, whilst also fighting patent battles, as if the existing technology arms-race weren't enough... among a host of other commitments? You and I (and I take that most of the HN community) are purists... not everyone else is.
specialp 11y ago
This is going to continue and get worse. Margins are going to be under pressure even for Apple and Samsung. The technology in phones is leveling off. Chinese manufacturers that for a long time were making everyone else's phones are now making their own. This is a repeat of HDTVs march towards very low margins as technology converged, and Chinese brands took over. Android provides an ecosystem for free*. Lately phone enhancements have been things like 0.2 ghz faster processor, larger screen, fingerprint reader. Reminds me a lot when HDTVs were offering higher refresh rates, gimmicks like 3D TV. Consumers decided they were not going to scrap their $2000 TV for another $2000 TV. Now those $2000 TVs are < $500. So are consumers going to keep shelling out $600+ for a new phone every year or 2? Now in the USA they are more exposed to the price of the phone due to the elimination of contracts with phone subsidies. I suppose the fact that most phones are fragile causes them to break more and be replaced, but phones are commoditized now, and will continue to decrease in price and margin.
- maxerickson 11y ago
  I think slipping margins are behind the move to the lease a phone model. The price point for a satisfactory phone is headed below $200, where most people are going to buy outright, or at least pay for it in 1 year. Lease a phone keeps them from thinking about the option to not have a phone payment.
- ZeroGravitas 11y ago
  And when you say "get worse" you mean "get better"? Like, capitalism working vaguely like it's promised to and companies competing to provide maximum value at mininum price?
  - jimbokun 11y ago
    I think it's pretty clearly referring to the position of phone manufacturers. But yes, it's working out well for all us consumers.
    - ZeroGravitas 11y ago
ck2 11y ago
Check out what you get for $20 these days: http://www.walmart.com/ip/Straight-Talk-LG-Prepaid-Destiny-L21G-Smartphone/45822123 http://www.walmart.com/ip/Straight-Talk-LG-Prepaid-Destiny-L... (it constantly comes back into stock and sells out again) quad-core cpu, 1GB of ram, 854x480 screen, Lollipop 5.1 http://www.lg.com/us/cell-phones/lg-L21G-destiny http://www.lg.com/us/cell-phones/lg-L21G-destiny it's gsm but you'll never unlock a tracphone for other carriers
ZeroGravitas 11y ago
My question has always been: are the phones losing money, or the companies? This is similar to the "Tesla loses X thousand on each car" thing. There's two ways to interpret that, 1) the more cars they sell the more money they lose, 2) as they sell more cars, they bring in more profit, and their total loss (from investments in factories etc.) divided across total sales will decrease, until it becomes positive. So which is the case in Android land? I've never seen anything close to a thorough investigation of this point. Back in the early days of Android, the switch to Android seemed to bring companies back from making loses, into rough equilibrium, which always suggested to me that there was profit being made.
NetOpWibby 11y ago
The Aquos Crystal X is the best-looking Android phone I have ever seen...and I can't seem to get it here in the U.S. :(((

68 points by antr 11y ago

The mobile market is going to continue to grow for the foreseeable future. Getting in on the ground floor and "breaking-even" whilst getting a foothold in the market and building customer loyalty doesn't seem like a bad idea.

4ec327 11y ago
Agree with the idea of getting a foot in the door, but I don't think Android phone owners are very loyal.
- Klathmon 11y ago
  I completely disagree. My father in law won't buy anything else other than the Samsung Galaxy S series. To him it's not even android, it's a "Galaxy".
  - icebraining 11y ago
    Yeah, but the Galaxy is a line that avoided the fate that's being reported. The question is: do people have that attachment to cheap HTC and LG phones?
    - vilmosi 11y ago
      People are easier convinced to upgrade to a slightly better HTC/LG in the future, because "it's the same phone, but better". I understand the strategy.
    - Klathmon 11y ago
      That is a good point... I have an attachment to the Nexus series, but again that's obviously not in the same "tier" as the cheap HTC, LG, and even some bottom-of-the-line samsungs.
  - dingo_bat 11y ago
    You cannot lump galaxy phones wroth the other Android phones because it is the only range that makes money for its parent.
conceit 11y ago
I always assumed they went the big data way, seeing most are wannabe Apple copies using Google's android, to mine their customers for valuable data.
a_c_s 11y ago
How'd that work for pc makers? Their profit margins have shrunk from low to near-zero (>2.5%)[1] This is in contrast to Apple who has had healthy margins and have consistently improved market share nearly the last decade.[2] In the electronics business, unless you are significantly differentiated there there isn't much customer loyalty to be had. [1]http://www.theguardian.com/technology/2014/jan/09/pc-value-trap-windows-chrome-hp-dell-lenovo-asus-acer http://www.theguardian.com/technology/2014/jan/09/pc-value-t... [2]http://recode.net/2014/11/06/mac-hits-market-share-milestone-in-u-s-what-post-pc-era/ http://recode.net/2014/11/06/mac-hits-market-share-milestone...
- deleted 11y ago
  [deleted]

dovdov 11y ago

Like nobody would pay someone money to put a tapping device into your pocket. ;)

amolgupta 11y ago

How long has this post been in the draft? Samsung's position is no more as great as it suggests.

vlehto 11y ago
How so?
exelius 11y ago
Samsung's position isn't great; but it's definitely better than LG, HTC or Motorola. Samsung's mobile division is at least profitable; which can't be said for anyone else.
piquadrat 11y ago
Also, no mention of Huawei, which is now in 3rd place in phones sold, and catching up with the two top dogs fast. http://fortune.com/2015/10/28/smartphones-huawei-idc/ http://fortune.com/2015/10/28/smartphones-huawei-idc/

PaulHoule 11y ago

Stock Android is likely to be better than anything oems will modify it to be.

creshal 11y ago
Sadly, no OEM seems to understand that. Every single of their UIs either has a horrible UX, or is much slower than stock Android, or crashes, or all three. Urgh, why aren't there any modern 4/4.5" Nexus phones. :(
- gleenn 11y ago
  I used to buy this theory for a long time until I got my Nexus 5x. It has a lot of bugs. I actually miss the very polished feel of my Sony Z3 compact. Low ui tweaks, super dependable. It's a shame I hear Sony might be stopping its phone line, or maybe that's just a rumor.
  - davidwparker 11y ago
    Care to share what bugs you have / had on your 5x? I've had my 5x for months and only come across a couple of bugs, a couple of times- but they happened once and weren't reproducible.
    - gleenn 11y ago
      - I also regularly have to kill apps and restart them because they don't properly detect internet connectivity. I think this is actually due to people not testing apps against the new Doze functionality, which isn't Google's fault but definitely isn't the greatest user experience. - The camera software/drivers are really slow and crash regularly. - I get random spinners on videos that don't go away sometimes.
- alimbada 11y ago
  Nexus devices aren't immune from this. I had a Galaxy Nexus. I'm now an iPhone user.

DominikR 11y ago

Well, when I look at younger people (18-24) I often see a pattern of users that don't own a PC and most of the time don't even own a laptop. They use smartphones and sometimes tablets for most tasks. That might change once they get older, but maybe it wont. So I think it's a good idea for any company that was/is in the PC/laptop business to try and capture as much mobile computing marketshare as possible.

tempodox 11y ago
I use a tablet and a desktop computer besides my mobile phone and even for me, there is a noticeable gravitational pull towards “mobile computing”. While a dedicated screen and keyboard are clearly ergonomically superior, I just love the fact that I can hook a Bluetooth keyboard to my squawk box and make it a mobile remote terminal. All that's missing is infrastructure to log into your “home” (whatever that is) securely and with your privacy intact.
- solnyshok 11y ago
  can you elaborate on the "home" part of this? do you have a 24x7 box at home? then openvpn solves secure access part. or, did you mean the lack "needed but not existing yet home control hub for lights, heating, fridge, music, surveillance, etc."?
maxerickson 11y ago
I think for casual users of any age, having a desktop at all has become atypical.
vilmosi 11y ago
Younger people. As in unemployed or McJobs. They never had a PC. For students, gamers and young professionals, they all have a PC.
- DominikR 11y ago
  This is simply not true. I know many students that don't have a PC, only a laptop at most that is almost never used. (only to write papers) Those students are not studying anything tech related. (Psychology and stuff like that) And doing mundane tech related tasks only with a smartphone is not as bad or awkward as one would imagine. For example for scanning documents I use my PC (built out of components I picked myself) that dual boots into Windows 7 / Mac OSX (Hackintosh - lots of fiddling around with drivers) that is connected to a scanner via network cable. (which often does not work without restarting the scanner) My girlfriend uses a non modified out of the box iPhone and does the same thing with much less effort (if you count the time I invested in my setup and keeping it running) with an app that uses the phones camera to "scan" documents. I was completely baffled when I first saw that. She doesn't have to care about setting up the OS (okay, you can buy a PC with preinstalled OS), dealing with updates and drivers, downloading and manually installing software from some website and managing storage. I'm pretty sure she wouldn't even need a laptop if she had a quality tablet with a good bluetooth keyboard.

grabcocque 11y ago

The sunk cost fallacy, basically. That or Stockholm syndrome.

homarp 11y ago

Maybe they should try to be different, instead of being iPhone clones. Every one I know have a super slim phone, then a case to prevent it to be broken and make the phone not slim anymore and then a second battery. So why not make a less slim phone with hardened chassis and a longer battery ? And market it as such (you want slim that last 8h and you can't plug your earphones, go Apple, you want solid that last 2 days and you can plug your earphones, buy Me) And they also should embrace XDA community who work for free in advocating "a phone". And they should also accept that a premium 4.5 /4.8 screen phone is also in demand, not just 5.5 and 6.0. And give removable battery so we, paranoid, can really unplug the phone without having to put in the fridge.

dorfsmay 11y ago
There are such models, the One Plus One is an example.
- lorenzhs 11y ago
  I own one and the OnePlus One has its own set of problems. Maybe most annoyingly, the touch screen doesn't work in warm weather. It also took them months to fix very basic functionality (the touch screen had ghost touch issues for a great deal of people in the beginning). Support barely exists (I don't know if they managed to improve on that by now). Also CyanogenOS is getting more and more annoying, with tons of crapware being bundled (a weird dialler, Cortana) and even ads (the "open with" intent chooser has suggestions to install Microsoft apps for certain file types). Oh and it frequently doesn't play well with Google Play Services. There's an awful lot of battery drain because Play Services doesn't seem to like some of the modifications they made. Currently mine loses some 30% of charge overnight in airplane mode.
zanny 11y ago
Of maybe a phone that respected user privacy. Even if you couldn't open source the modem firmware due to the FCC, you could at least put it behind a IOMMU rather than having it as half the SoC with the power to take control of perpiherals and read memory whenever it wants, independently of what the CPU is doing. Just give me something 5", with a big battery, big frame - as you describe - 1080p, I don't care about the display war, decent storage, usb-c, an sd card slot, and a camera that is alright and it is an instant purchase for myself and everybody whose tech purchasing I influence if it is FSF certified.

venomsnake 11y ago

One of the things the article fails to mention is that both LG and Sony make damn fine devices (and superior to the Samsungs). Z compact series is the only small first class smartphone. Why Apple succeeded? Because they did not allowed the carriers to interfere with their software and updates. Why all of those companies are in that position - because they did (honorable mention for WP7,7.5,8 and 10).

stevetrewick 11y ago
Definitely helps. Apple probably learned this from watching what happened with the most popular pre iPhone smartphone OS, Windows Mobile/CE. Good (for its time) OS ruined by OEMs and carriers.
DominikR 11y ago
I fully agree, but I also doubt that Sony or LG are able to create a good enough OS for the consumer market. (I cringe when I think about the Smart TV OS they use on their TVs) Apple can build, own and control every part of their hardware/software. Google could probably too, but they chose a different path to distribute their OS. Edit: I don't mean to say that Sony or LG engineers are not great, it's just that you need to have experience with this type of product to build something that is really great. Sony and LG always built their own software but not on that level as their focus was always more on the hardware side.
- konceptz 11y ago
  I believe that one of the tv systems (forgot who) is webos, a very fine mobile platform from what I recall. Purchased and reimplemented by (un)said manufacturer.
- venomsnake 11y ago
  >I fully agree, but I also doubt that Sony or LG are able to create a good enough OS for the consumer market. (I cringe when I think about the Smart TV OS they use on their TVs) They don't need to. Stock android is stellar since 4.2. Just make the hardware and get out of the way.
11y ago

tempodox 11y ago

> Android ... is a first-class mobile OS While I wouldn't deny that, as an app platform it doesn't hold a candle to iOS.

rhodysurf 11y ago
In what respect?
- motoboi 11y ago
  I think this used to be true because Android phones had worst hardware and Android versions market share were too fragmented. We still have a majority of cheap android phones on the market (think outside the US), but Google is making a good advance in bringing new APIs to old versions.
- tempodox 11y ago
  I guess iOS is more geared towards devs who have been building desktop apps while Android seems to be more approachable if you come from building web apps. There are corners in Android where “persistent state” seems to become a problem, even affecting UI. I'm sure one could expand the discussion, but let this suffice.
tempodox 11y ago
I realise that saying anything ever-so-slightly non-fanboyish about Android is an irresistible licence to downvote, but really: can you try to behave less pavlovian?

ocdtrekkie 11y ago

Well, Google's making bank on it. $31 billion. It seems like OEMs are burdened with most of the work and the costs of support and liability and update distribution (even if a software bug is Google's doing), yet Google gets to rake in the cash.

discreditable 11y ago
OEM's update woes are their own doing. The further they get from AOSP the more painful it is to hack updates together.
- ocdtrekkie 11y ago
  That's kinda false on multiple fronts. First and foremost: From everything I've heard Google doesn't go out of their way to support any hardware besides Nexus devices, so if you use any different chips, you have to do your own work to get it to work. Also, Google often ships Android versions non-compliant with carrier requirements. I remember when the last Nexus 7 rolled out, it's radios were compatible with Verizon, but they couldn't meet Verizon's standards for certification until a later patch level of Android. OEMs often have to bear the burden of making Android actually work on a carrier. And finally, the further they get from proprietary Google Android (it's not AOSP if it has Google Apps), the more likely they solve the 'lack of profit' problem. Google saps up all of the potential revenue streams for a manufacturer with it's various apps and services that OEMs are forced to install. Many of their own apps and customizations offer them additional potential for income.

a2tech 11y ago

Its the Dell problem-they think if they cut the margins to the bleeding edge they'll make it up in volume. Just like Dell though they all find its a tricky edge to walk. Playing the volume game means you're one bad quarter from your phone division tanking.

mojuba 11y ago

Free or ultra-cheap phones with ads anyone?

ck2 11y ago
You don't need ads when they can carrier lock like tracfone/net10/straightalk does (all same company). But you now can get free service with ad supported networks like RingPlus

bobajeff 11y ago

This article comes at a time when I'm looking for a new phone but nothing looks good to me. Not even the iPhone. They don't want to make phones a small as I like and they refuse to make true standalone smartwatches that can make and receive calls/texts and use GPS by themselves.

roymurdock 11y ago
If you're looking for a smartphone, I still recommend the iPhone 5/5s - the form factor is perfect, the price point is good, and the hardware should be new enough to handle anything you might want to throw at it for the next 2 years. My iPhone 5 is reaching the end of its life...I'm planning on getting a dumb phone next with a ton of battery life, a decent camera, and a nice keyboard.
- endemic 11y ago
  Or the rumored new 4" iPhone.
maxerickson 11y ago
It expects you to use a phone to manage it, but the Gear S is a phone in its own right: http://www.samsung.com/us/explore/gear-s-features-and-specs/ http://www.samsung.com/us/explore/gear-s-features-and-specs/ LG almost brought a 4G one to market last fall but pulled it at the last minute.
downtide 11y ago
I think it's an inherent usablity issue. The two functions I'd like from a smart phone (other than calls and SMS), is mapping and the odd web lookup. I've currently got a Blackberry as a hand me down with the old form factor: half screen, half keyboard. Personally the keyboard is too much of a nuisance for me, and most websites just don't work that well on it. To the point, I'll only use it, if I really have to. So most of the time, I have an oversized item in my pocket, that I don't really care for, that runs out of battery quickly, and makes me curse daily. A classic old phone (small nokia form factor) with WAP style browsing would actually suit me more. But actually I think it's more a matter of coming up with a user interface that can work with a small screen. Pure text isn't that bad.

roymurdock 11y ago

Article gives 3 main reasons why companies such as Samsung, LG, Sony, and HTC continue to make smartphones (and lose money w/ the exception of Samsung): 1. every new smartphone bearing the company’s insignia serves as an engineering showcase for the various component businesses that comprise its vast conglomerate 2. LG believes it needs a smartphone to connect to its growing ecosystem of smart home, TV, and in-car gadgets, plus phones provide free and ubiquitous advertising 3. Others see smartphones as a conduit to generating profits elsewhere. Xiaomi is famous for selling phones at cost and then seeking to capitalize on a well-disposed user base by selling additional services and extras like luggage. Of these 3, the only one that makes financial sense to me is 2. For companies that are so heavily invested in connected white goods and home automation, selling a smartphone that can control a home hub at cost is akin to giving away a free remote control for a TV. It helps bring users into the ecosystem and can help guide their fridge, TV, security network, etc. purchasing decisions.

inthewoods 11y ago

I've never understood why OEMs think there is value in altering Android. As far as I can tell, it just gives them higher costs in exchange for some vague perception of additional value in terms of the customer value. It would seem more logical to me for OEMs to say "screw it, let's just make the best hardware" and minimize their software development costs which they are paying to Google. I would have thought another lesson from Windows is that bloatware is hated and doesn't improve anything - although in the Windows world, the PC makers likely made money by including the bloatware on their machines. Of course, none of this would solve the update issue as far as I can tell because the carriers are always involved in checking updates. Obviously, Apple bypasses this issue - but my question is why does it still exist for other phones? Carriers always say they need to check the phones - but why? And if so, why don't they need to check iPhone updates? My cynical assumption is that carriers want control and they add actually zero value but do this to maintain control.

rst 11y ago
Early Android native UIs were rough enough that manufacturer skins were arguably real improvements. That case has gotten a lot weaker since the Google mothership started getting serious about design.
- frik 11y ago
  Exactly. While Android 1.x looked more like Win95/WinCE, and Android 2x still had some rough edges. Samsung TouchWiz UI for Android 2 made it look modern and very similar to what Android 3/4 looked like.
  - inthewoods 11y ago
    Good point - agreed - but now these OEMs seem convinced that they are actually adding value. Sunken cost fallacy I suppose.
ignoramous 11y ago
Much of the customization stem from fixing android's perceived shortcomings by the product-management at respective OEMs. Besides, you must realise that Google doesn't engage OEMs as much as it should when it decides what goes and what doesn't AFAIK, Google does it own prod-mgmt. Android isn't a standard. Which is a good thing, 'cause it can move fast and break things (which it often does). For instance, Amazon saw that the WebView was tightly tied with Android and that was security concern (up until it was freed in Android L), and so Amazon made it OTA'able in its third iteration of Fire OS (Android K). Also, in a crowded market, you need a differentiator. If every phone is going to look and do the same thing, why would anyone buy one device over another? Samsung needs to market things with its offering, it can't just do so with Hardware. It needs the stylus to justify the exorbitant price tag on its Galaxy Note line of products. It needs floating activities on its mega-screen and wants people to get hooked on to that feature, to an extent that they can no longer do without it, which makes sure they'd buy and recommend Samsung over other OEMs. Secondly, hardware is just one part of the equation. Sometimes you require vast changes in Software to make sure the hardware is properly utilized... Or you just have a better Software solution up your sleeve than what Google gave you. Thirdly, some of the Google Apps aren't stellar-- Photos is miserable, Camera is a-okay, Music Player is a-okay, Video Player is miserable, Launcher isn't smart, Lockscreen isn't smart. You need premium apps for your devices. Besides, why would you want Google to walk away with the cake (usage information generated using all those apps) from a customer you acquired with all those hours you spent marketing the phone, establishing your brand, figuring out the quirks of doing businesses globally, toiling endlessly to sort out the logistics, whilst also fighting patent battles, as if the existing technology arms-race weren't enough... among a host of other commitments? You and I (and I take that most of the HN community) are purists... not everyone else is.

specialp 11y ago

This is going to continue and get worse. Margins are going to be under pressure even for Apple and Samsung. The technology in phones is leveling off. Chinese manufacturers that for a long time were making everyone else's phones are now making their own. This is a repeat of HDTVs march towards very low margins as technology converged, and Chinese brands took over. Android provides an ecosystem for free*. Lately phone enhancements have been things like 0.2 ghz faster processor, larger screen, fingerprint reader. Reminds me a lot when HDTVs were offering higher refresh rates, gimmicks like 3D TV. Consumers decided they were not going to scrap their $2000 TV for another $2000 TV. Now those $2000 TVs are < $500. So are consumers going to keep shelling out $600+ for a new phone every year or 2? Now in the USA they are more exposed to the price of the phone due to the elimination of contracts with phone subsidies. I suppose the fact that most phones are fragile causes them to break more and be replaced, but phones are commoditized now, and will continue to decrease in price and margin.

maxerickson 11y ago
I think slipping margins are behind the move to the lease a phone model. The price point for a satisfactory phone is headed below $200, where most people are going to buy outright, or at least pay for it in 1 year. Lease a phone keeps them from thinking about the option to not have a phone payment.
ZeroGravitas 11y ago
And when you say "get worse" you mean "get better"? Like, capitalism working vaguely like it's promised to and companies competing to provide maximum value at mininum price?
- jimbokun 11y ago
  I think it's pretty clearly referring to the position of phone manufacturers. But yes, it's working out well for all us consumers.
  - ZeroGravitas 11y ago

ck2 11y ago

Check out what you get for $20 these days: http://www.walmart.com/ip/Straight-Talk-LG-Prepaid-Destiny-L21G-Smartphone/45822123 http://www.walmart.com/ip/Straight-Talk-LG-Prepaid-Destiny-L... (it constantly comes back into stock and sells out again) quad-core cpu, 1GB of ram, 854x480 screen, Lollipop 5.1 http://www.lg.com/us/cell-phones/lg-L21G-destiny http://www.lg.com/us/cell-phones/lg-L21G-destiny it's gsm but you'll never unlock a tracphone for other carriers

ZeroGravitas 11y ago

My question has always been: are the phones losing money, or the companies? This is similar to the "Tesla loses X thousand on each car" thing. There's two ways to interpret that, 1) the more cars they sell the more money they lose, 2) as they sell more cars, they bring in more profit, and their total loss (from investments in factories etc.) divided across total sales will decrease, until it becomes positive. So which is the case in Android land? I've never seen anything close to a thorough investigation of this point. Back in the early days of Android, the switch to Android seemed to bring companies back from making loses, into rough equilibrium, which always suggested to me that there was profit being made.

NetOpWibby 11y ago

The Aquos Crystal X is the best-looking Android phone I have ever seen...and I can't seem to get it here in the U.S. :(((