Cell Phones Becoming Profitless

saccade.com writes "EE Times has a fascinating article on how electronics companies are being sucked into a profitless spiral by the cell phone market. More and more of the small consumer gadgets are being folded into the phone: camera, music player, PDA, GPS, etc. So the market for non-phone gadgets is slowly going away as the phone picks up more functions. However, consumers don't buy most phones; they are given away (or sold very cheap) by the service providers as hooks to get people to sign up for mobile service. So the service providers are demanding (and getting) rock-bottom prices for fancy phones they can give away, and the micro chip companies are forced into brutal competition for a market that is shrinking into a single commodity gadget, the phone."

Comments

Re:Crossing the Chasm

[PacoTaco]

For most users, these devices will be powerful enough to toss their PCs for good.

I can't wait until they add 3D accelerators that use the side of your face as a heat sink.

Re:Price of phones

[Frogbert]

Actualy Australia has this really nifty store called Dick Smith Electronics, this store is very cool because they have a mobile phone recycling bin inside. The idea being that customers put their old mobiles in the bin and Dick Smith recycles it and saves the envronment from harmful chemicals. However this bin serves another great purpose, its a constant source of free phones for me! Every time my phone breaks its another trip to Dick Smith for a rummage through the bin. A new battery later and I've got a new phone.

As a side note if you do decide to go through the phone bin make sure you smell the phone you want to take... you would be shocked at how many times the vibrate function is flagrantly abused on old phones.

No I am not joking.