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

Good - couldn't happen to a nicer bunch of people

[gelfling]

The last time I checked a reasonably priced low end mp3 player was more than a hundred bucks. A cheap snapshot digital camera, ditto. A voice recorder - same thing. And don't even get me started with Palm. And those features on phones are not that dramatically worse than standalone devices.

And who wants to walk around with Batman's utility belt anyway?

What all those gadget makers are discovering that all their gadgets really aren't worth that much.

Now if we could just nuke all the phone companies and send their employees straight to hell it would be GLORIOUS.