For Some, A Cheap Smartphone Misses the Mark

I was just responding on Twitter to Vision Mobile (@visionmobile) about an article that they tweeted. In this TechCrunch piece, it was alluded to by Eric Schmit that a $70 smartphone is going to be some sort of holy grail for the adoption of smartphones. And at that pomint, its not inconceivable that there could be an Android mobile in every pocket. I get the entheusiam, but I don’t think a $70 smartphone will make that happen – the device costs totally misses the pain point that most people have with mobiles – the cost of service.

One of the issues that I am personally running into now is this idea of being connected not costing me an arm and a leg. And I’m got some cachet as a mobilist. Its not that my mobile is any more or less capable (I still am using the Nokia N8, and it holds up very well to my needs). But, it is the case that the increasing costs of mobile service, without getting anything more intelligently done with the services is what’s getting to me. Therefore, like many people whom I’m in conversations with often (those folks that could care less about the specs of a mobile device, they just want a signal that doesn’t drop, and a device that doesn’t break when dropped or dipped), I’m looking to cut costs. On my end, I’m in the midst of an experiment looking at Simple Mobile for a month as a solution for data and messaging needs. Cheaper by more than half, and potentially no major drop off in quality of service (PrePaid Phone News).

And I think that it is for others as well. Some time ago at MMM, we up an article pointing to a case study by Movirtu, a mobile network and device provider which prices their offering for those folks whom would be considered at or near the bottom of the economic pyramid. Its not that smartphones and the like aren’t helpful there – but as currently configured and offered, the cost of owning a smarpthone is just too high for folks.

Think about it like this, there was another person on Twitter (@UVStaska) who recently tweeted that their Google Nexus was of no use to them becuase they didn’t have a data connection (whether this was because of lack of a data SIM or WiFi connectivity wasn’t clear). This is a person who was at the Mobile World Congress event, around several thousand other mobilists, and probably just as many mobile/telecom companies, and was let down by a device that couldn’t work for them because there was no data connection available. If its the case that Android can’t exist without a data connection, then Google and its Android partners need to do something about that aspect of connectivity before addressing the device costs.

So, then my response to Vision Mobile went more like this: if Google can make Android more relevant than Facebook Zero, then yes, a $70 device makes sense. But right now, at least in those markets where post-paid contracts are not the primary or favored means of being mobile (I’d argue that’s probably 2/3 of the 5 billion some-odd folks using mobile, but its probably more than half easily), Google has a probem with the argument that a $70 mobile fits.

What about Google is so relevant that carriers will willingly take on the costs of the data portion of a consumer’s device? It can’t be Google+, and its definitely not search. Some might think that email or maps might be suitable, but I’d argue that those are only important when transtioning to another felt/economic need. Look at Nokia’s Life Tools, these are services built on top of the basics of messaging, serarch, mapping, etc. which add value to specific economic regions and allow for some relevance to be made towards having a device that can show a bit more, play a bit louder, or be connected a bit more. That’s the kind of OTT service offering that makes a low-cost, high-performing device (a $70 smartphone) much more valuable. Sad thing is that for all the success that Life Tools is having, nothing like that exists (for example), in the USA where there’s definitely a need to connect mobile with skills-development activities.

My point is simple. If Google (and others) want to think that a $70 smartphone is some kind of panchea, great. Think that. But, put your actions towards reducing the costs of the service or, add some value on top of the service that makes it beneficial that having a cheap and capable device works. Yes, I know that people will only purchase what the carriers will shill to them (ignorance ain’t bliss for all), but don’t some of us need to start calling into account whatever it is that companies say they are doing make mobile (or any tech) relevant?

When the only cost to being connected is the device (not service, not privacy, not security, etc.), then we can say that a $70 device will be the best thing for everyone (who can afford it). Until that point, its better to take inventory of the actual pain points of use beyond simply getting a suit for this communications marriage.

5 thoughts on “For Some, A Cheap Smartphone Misses the Mark

  1. i believe schmidt’s comments on the need for inexpensive smartphones were primarily targeted at developing markets where data plans are significantly less expensive than in the US. while such plans typically cost US$ 50-100 per month in the US, they cost the equivalent of US$ 0.50-1.00 per month in India (if i recall correctly).

    in addition, i’m not sure you’re quite representative of the target customer…in developing markets, there are oftentimes very few attractive options for Internet access.

    lastly, it’s quite common for developing market wireless subscribers to share a single phone and plan amongst an extended family, business or other group.

  2. No, I’m not (yet) the market Google is targeting for inexpensive smartphones – I interact with the market they are targeting with daily though 😉 And there’s nothing developing about those folks except impatience at service quality and costs.

    Cost of data plans: I’ve not seen, with the exception of markets selling the iPhone or wanting to appear as forward as those whom are, that data costs are inexpensive at all. Usually, there’s not a plan at all, but a pay per MB approach where for 1GB of data you’d pay the equivelant of #30-50 or more. In those areas, affordance of a cheap mobile doesn’t even begin to address the service costs, which is the point of my writing. Nothing in the current Android use model fits inexpensive costs, it *requires* the data plan just to be operated regularly… that is carrier-friendly, not consumer.

    The shared mobiles: Android doesn’t do this quite well. Mobiles are locked to one account. Unless each of those folks using the data services are inclined to have all of their activity happen under one account but several SIMs seems a bit unknowing of the capabilities of the device. Multi-SIM devices seem a much better fit in that context.

    Android requires post-paid behavior in much of the world that’s not even caring about “credit” behaviors. A device costing 2x the monthly salary of many doesn’t help that perception.

  3. nice to hear back from you, antoine.

    perhaps you’ve seen this (timely) nyt article on facebook usage in india:

    “I couldn’t help but notice my taxi driver’s spanking new Nokia phone on a recent ride in Mumbai…

    Impressed, I asked him “What do you use the Internet for?”

    “Facebook,” he said.

    “You are on Facebook?”

    “Yes, of course.”

    “How much do you pay for net access?”

    “99 rupees (about $2) a month.””

    in regards to your point about android not being well-suited to shared mobiles, i concede the point as i’m not well-versed in the android platform…

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