5 ms·

The $85 Smartphone and the imminent extinction of non-smartphones

38 points by barredo 16y ago

Zev 16y ago
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.
- thyrsus 16y ago
  The cheapest data plan available to me is $180/yr. I've got wifi or better access any time I'm not driving, so I'm going to be annoyed if I'm forced to pay for something I'll rarely use.
- martey 16y ago
  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. If I ran an American cellular phone carrier, I would be remiss not to push my customers toward using phones with higher profit margins for me. If I needed to get customers to use smartphones by giving them away (with the realization that I would make the money back over the course of their contract), so be it. Consumers may want non-smartphones, but if their carriers are giving them incentives to buy smartphones, I am not sure that mandatory data plans will prevent them from succumbing.
- lukeschlather 16y ago
  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 16y ago
    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.
iworkforthem 16y ago
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 16y ago
  * 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.
  - ams6110 16y ago
    Though if you get one cheap/subsidized, the carriers I've seen will require a new 2 year contract with a data plan.
  - iworkforthem 16y ago
    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.
earl 16y ago
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
- sofuture 16y ago
  You're not the only one! Thank god for Ebay -- I'm going to be using dumbphones for a long time.
  - listic 16y ago
    Not only eBay, but Nokia too. Nokia isn't going to stop producing cheap quality dumbphones anytime soon. (like this: http://www.gsmarena.com/nokia_1202-2573.php http://www.gsmarena.com/nokia_1202-2573.php)
    - csytan 16y ago
      I had this phone while backpacking in Asia. It's the most well designed and simple phone I've ever used. Now I have the Americanized version which has a color screen which hurts the eyes, terrible software, and a cheap feeling case.
trotsky 16y ago
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 16y ago
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 16y ago
  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.
rospaya 16y ago
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.
iphoneedbot 16y ago
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
iphoneedbot 16y ago
Remember Open Moko? http://wiki.openmoko.org/wiki/Main_Page http://wiki.openmoko.org/wiki/Main_Page http://wiki.openmoko.org/wiki/Neo_FreeRunner http://wiki.openmoko.org/wiki/Neo_FreeRunner What -ever happened with that? or the dream of ULTRA CHEAP laptops?
anonymous246 16y ago
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.
- steveklabnik 16y ago
  Isn't a iPod Touch that's a cellphone... just an iPhone? Am I missing something?
  - anonymous246 16y ago
    Yes. (1) you can get it for $200 w/o contract, and (2) no mandatory extra monthly fees for data.
    - steveklabnik 16y ago
      The extra fees aren't mandatory, if you just buy one and activate it without them knowing, I bet. And the touch is only $200 because it doesn't include all of that hardware. They're much thinner. I bet they'd be a bit more if you put that stuff in there...
      - anonymous246 16y ago
        What hardware doesn't it include which can account for the $400 price difference between Touch and iPhone (same goes for Android phones also). I would love to be proven wrong that there is some objective reason why the cellphone chip and a GPS chip would add $400 to a device (standalone cellphone and GPS together will cost less than $100, so the bare chips should be much less).
- halo 16y ago
  Since Android 2.2 you can disable packet data and only use Wi-Fi for Internet access.
  - 16y ago
cletus 16y ago
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 16y ago
  In Auastralia the plan I've just moved to (http://www.tpg.com.au/mobile/plans.html http://www.tpg.com.au/mobile/plans.html) gives me enough calls, text and data for $15 a month without any lock in. I've been looking into US contracts in preperation for a move and was shocked at the rates people are willing to pay.
- gommm 16y ago
  In China, after paying for the cost of the iphone as downpayment (so around 700$), it costs 10$/month to get 15 hours call and 1.2 Gb/month data plan... That's under a unicom plan. Compare this to France for example where the plans easily exceeds 40 euros for "unlimited" data plan where you're not allowed to download more than 500Mb...
- gommm 16y ago
  In China, after paying for the cost of the iphone as downpayment (so around 700$), it costs 10$/month to get 15 hours call and 1.2 Gb/month data plan... That's under a unicom plan. Now, this is not all of Asia, it's mostly because China is still not a very expensive place to live (although the price of housing in Shanghai is starting to look more and more like any international capitals...). When I lived in Japan, I paid 60$ for a phone subscription with 3 hours calls and no data plan (this was 4 years ago) and France is not much better than the US, plans easily exceeds 40 euros for "unlimited" data plan where you're not allowed to download more than 500Mb and with this you don't get much hours of call either... It's true though that the US is one of the only country I know where you pay to receive calls and to receive SMS.

38 points by barredo 16y ago

Zev 16y ago

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.

thyrsus 16y ago
The cheapest data plan available to me is $180/yr. I've got wifi or better access any time I'm not driving, so I'm going to be annoyed if I'm forced to pay for something I'll rarely use.
martey 16y ago
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. If I ran an American cellular phone carrier, I would be remiss not to push my customers toward using phones with higher profit margins for me. If I needed to get customers to use smartphones by giving them away (with the realization that I would make the money back over the course of their contract), so be it. Consumers may want non-smartphones, but if their carriers are giving them incentives to buy smartphones, I am not sure that mandatory data plans will prevent them from succumbing.
lukeschlather 16y ago
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 16y ago
  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.

iworkforthem 16y ago

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 16y ago
* 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.
- ams6110 16y ago
  Though if you get one cheap/subsidized, the carriers I've seen will require a new 2 year contract with a data plan.
- iworkforthem 16y ago
  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.

earl 16y ago

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

sofuture 16y ago
You're not the only one! Thank god for Ebay -- I'm going to be using dumbphones for a long time.
- listic 16y ago
  Not only eBay, but Nokia too. Nokia isn't going to stop producing cheap quality dumbphones anytime soon. (like this: http://www.gsmarena.com/nokia_1202-2573.php http://www.gsmarena.com/nokia_1202-2573.php)
  - csytan 16y ago
    I had this phone while backpacking in Asia. It's the most well designed and simple phone I've ever used. Now I have the Americanized version which has a color screen which hurts the eyes, terrible software, and a cheap feeling case.

trotsky 16y ago

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 16y ago

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 16y ago
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.

rospaya 16y ago

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.

iphoneedbot 16y ago

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

iphoneedbot 16y ago

Remember Open Moko? http://wiki.openmoko.org/wiki/Main_Page http://wiki.openmoko.org/wiki/Main_Page http://wiki.openmoko.org/wiki/Neo_FreeRunner http://wiki.openmoko.org/wiki/Neo_FreeRunner What -ever happened with that? or the dream of ULTRA CHEAP laptops?

anonymous246 16y ago

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.

steveklabnik 16y ago
Isn't a iPod Touch that's a cellphone... just an iPhone? Am I missing something?
- anonymous246 16y ago
  Yes. (1) you can get it for $200 w/o contract, and (2) no mandatory extra monthly fees for data.
  - steveklabnik 16y ago
    The extra fees aren't mandatory, if you just buy one and activate it without them knowing, I bet. And the touch is only $200 because it doesn't include all of that hardware. They're much thinner. I bet they'd be a bit more if you put that stuff in there...
    - anonymous246 16y ago
      What hardware doesn't it include which can account for the $400 price difference between Touch and iPhone (same goes for Android phones also). I would love to be proven wrong that there is some objective reason why the cellphone chip and a GPS chip would add $400 to a device (standalone cellphone and GPS together will cost less than $100, so the bare chips should be much less).
halo 16y ago
Since Android 2.2 you can disable packet data and only use Wi-Fi for Internet access.
- 16y ago

cletus 16y ago

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 16y ago
In Auastralia the plan I've just moved to (http://www.tpg.com.au/mobile/plans.html http://www.tpg.com.au/mobile/plans.html) gives me enough calls, text and data for $15 a month without any lock in. I've been looking into US contracts in preperation for a move and was shocked at the rates people are willing to pay.
gommm 16y ago
In China, after paying for the cost of the iphone as downpayment (so around 700$), it costs 10$/month to get 15 hours call and 1.2 Gb/month data plan... That's under a unicom plan. Compare this to France for example where the plans easily exceeds 40 euros for "unlimited" data plan where you're not allowed to download more than 500Mb...
gommm 16y ago
In China, after paying for the cost of the iphone as downpayment (so around 700$), it costs 10$/month to get 15 hours call and 1.2 Gb/month data plan... That's under a unicom plan. Now, this is not all of Asia, it's mostly because China is still not a very expensive place to live (although the price of housing in Shanghai is starting to look more and more like any international capitals...). When I lived in Japan, I paid 60$ for a phone subscription with 3 hours calls and no data plan (this was 4 years ago) and France is not much better than the US, plans easily exceeds 40 euros for "unlimited" data plan where you're not allowed to download more than 500Mb and with this you don't get much hours of call either... It's true though that the US is one of the only country I know where you pay to receive calls and to receive SMS.