3 ms·

What kind of information do you think would allow you to make the market of the phones substantially different than it is now? If you think the problem is info

by smsm42 2y ago

What kind of information do you think would allow you to make the market of the phones substantially different than it is now? If you think the problem is information, the sales of iPhones is about $200 billion per year. I am pretty sure that whatever is the information you are thinking about, it is possible to deliver it to the vast majority of the customer base for the small fraction of this sum. Which would allow to capture if not the whole market, than the significant portion of it - billions-sized portion. Why do you think nobody thought about doing it before you?

AnthonyMouse 2y ago
Lots of people thought about doing it. The problem is this: What people want is existing phones with some minor alterations that make them last longer and be easier to repair, which wouldn't significantly affect the manufacturing cost but would reduce future sales across the industry, because many people could buy a phone and be good for ten years. So the large incumbents like Apple and Samsung don't even offer this, because they have such high market share that losing industry-wide future sales costs them more than making more current sales, and also they have such high market share that they were already the ones getting the current sales. Then we would expect some smaller company to come by and eat their lunch, right? And you get ones like Fairphone and Librem that make the attempt, but those aren't just "Samsung Galaxy with a removable battery and open source drivers" because Samsung also won't sell you 95% of their existing phone wholesale and let you make those couple of changes people want. So they're stuck designing an entire phone instead of making a couple of changes to an existing phone, which is a heavy lift for a small company, and then the other aspects of the phone aren't competitive, or the price isn't. It's possible that someone will eventually get this right, but that doesn't mean that it's easy, and in the meantime the large incumbents are screwing everyone because the market is insufficiently competitive.
- smsm42 2y ago
  Lots of people thought about doing lots of things. Thinking about doing it and actually successfully doing it are two very, very different things, as any startup entrepreneur can tell you. > So they're stuck designing an entire phone instead of making a couple of changes to an existing phone, which is a heavy lift for a small company, Why a big company doesn't do it then? I mean, there are a lot of big companies not having a phone, and a bunch of big companies that used to have a phone and now don't. You'd think they'd do the easy thing and just add the extra 5% and eat Apple's lunch - but somehow they don't. Maybe that lunch is not as easily eatable as you think it is.
  - AnthonyMouse 2y ago
    > You'd think they'd do the easy thing and just add the extra 5% and eat Apple's lunch - but somehow they don't. Because the market failure is the size of the companies in the market. If you're big enough to sink the resources to make a competitive phone from scratch then you're expecting to capture a large chunk of the market, in which case you'll behave like a large incumbent with the incentive to sell disposable phones. To avoid this you need to bust up the vertical integration that makes it hard for small companies to make a competitive phone so that it's possible for a small company to make a device which is overall competitive while they're still hungry enough for market share to give customers what they want.
    - MichaelZuo 2y ago
      The vertical integration is why the $110 phone exists in the first place… If you arbitarily move the pricing bar then of course there may be more competitive small companies, relative to the new baseline.
      - AnthonyMouse 2y ago
        > The vertical integration is why the $110 phone exists in the first place… There is no evidence of that. If anything more vertically integrated devices (e.g. iPhone, Samsung flagships) cost more, because a vertically integrated market increases barriers to entry and impairs competition. A Samsung phone might very well have a Samsung CPU with Samsung RAM and Samsung flash made in Samsung fabs with a Samsung battery and a Samsung screen. Galaxy S24 Ultra, ~$1000. Meanwhile, the $110 phone was the Moto G Play. That's a Qualcomm CPU with Samsung RAM, a "Motorola"-branded battery which is probably Sanyo or Panasonic, and a third party screen and flash because Motorola doesn't make those either. It's $110 because it's full of fungible commodity parts. The issue is, some of them -- especially that CPU -- are poorly documented and full of tightly integrated but closed source firmware/drivers. Which has nothing to do with the manufacturing cost of the hardware. A fully-documented open-source RISC-V CPU is not going to cost more.
        2y ago

by smsm42 2y ago

AnthonyMouse 2y ago

Lots of people thought about doing it. The problem is this: What people want is existing phones with some minor alterations that make them last longer and be easier to repair, which wouldn't significantly affect the manufacturing cost but would reduce future sales across the industry, because many people could buy a phone and be good for ten years. So the large incumbents like Apple and Samsung don't even offer this, because they have such high market share that losing industry-wide future sales costs them more than making more current sales, and also they have such high market share that they were already the ones getting the current sales. Then we would expect some smaller company to come by and eat their lunch, right? And you get ones like Fairphone and Librem that make the attempt, but those aren't just "Samsung Galaxy with a removable battery and open source drivers" because Samsung also won't sell you 95% of their existing phone wholesale and let you make those couple of changes people want. So they're stuck designing an entire phone instead of making a couple of changes to an existing phone, which is a heavy lift for a small company, and then the other aspects of the phone aren't competitive, or the price isn't. It's possible that someone will eventually get this right, but that doesn't mean that it's easy, and in the meantime the large incumbents are screwing everyone because the market is insufficiently competitive.

smsm42 2y ago
Lots of people thought about doing lots of things. Thinking about doing it and actually successfully doing it are two very, very different things, as any startup entrepreneur can tell you. > So they're stuck designing an entire phone instead of making a couple of changes to an existing phone, which is a heavy lift for a small company, Why a big company doesn't do it then? I mean, there are a lot of big companies not having a phone, and a bunch of big companies that used to have a phone and now don't. You'd think they'd do the easy thing and just add the extra 5% and eat Apple's lunch - but somehow they don't. Maybe that lunch is not as easily eatable as you think it is.
- AnthonyMouse 2y ago
  > You'd think they'd do the easy thing and just add the extra 5% and eat Apple's lunch - but somehow they don't. Because the market failure is the size of the companies in the market. If you're big enough to sink the resources to make a competitive phone from scratch then you're expecting to capture a large chunk of the market, in which case you'll behave like a large incumbent with the incentive to sell disposable phones. To avoid this you need to bust up the vertical integration that makes it hard for small companies to make a competitive phone so that it's possible for a small company to make a device which is overall competitive while they're still hungry enough for market share to give customers what they want.
  - MichaelZuo 2y ago
    The vertical integration is why the $110 phone exists in the first place… If you arbitarily move the pricing bar then of course there may be more competitive small companies, relative to the new baseline.
    - AnthonyMouse 2y ago
      > The vertical integration is why the $110 phone exists in the first place… There is no evidence of that. If anything more vertically integrated devices (e.g. iPhone, Samsung flagships) cost more, because a vertically integrated market increases barriers to entry and impairs competition. A Samsung phone might very well have a Samsung CPU with Samsung RAM and Samsung flash made in Samsung fabs with a Samsung battery and a Samsung screen. Galaxy S24 Ultra, ~$1000. Meanwhile, the $110 phone was the Moto G Play. That's a Qualcomm CPU with Samsung RAM, a "Motorola"-branded battery which is probably Sanyo or Panasonic, and a third party screen and flash because Motorola doesn't make those either. It's $110 because it's full of fungible commodity parts. The issue is, some of them -- especially that CPU -- are poorly documented and full of tightly integrated but closed source firmware/drivers. Which has nothing to do with the manufacturing cost of the hardware. A fully-documented open-source RISC-V CPU is not going to cost more.
      - 2y ago