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Why Cheap Smartphones Are Going To Upset the Industry

An anonymous reader writes "Just when people got used to good smartphones costing $200 with a 2-year contract, they also started to realize that those 2-year contracts were bad news. Still, it's often more palatable than fronting $600 for good, new hardware. But that's starting to change. Cell phone internals are getting cheap enough that prices for capable devices have been creeping downward below $200 without a contract. We ran into something similar with the PC industry some years back — previous-gen chips had no trouble running next-gen software (excluding games with bleeding-edge graphics), and so the impetus to keep getting the latest-and-greatest hardware disappeared for a lot of people. That revolution is underway now for smartphones, and it's going to shake things up for everybody, including Apple and Samsung. But the biggest effects will be felt in the developing world: '[F]or a vast number of people in a vast number of countries, the cheap handset will be the first screen, and the only screen. Their primary interface with the world. A way of connecting to the Internet where there are no telephone lines or coaxial cables or even electricity. In nations without subsidized cell phone contracts or access to consumer credit, the $50-and-you-own-it handset is going to be transformative.'"

15 of 234 comments (clear)

  1. Upset the industry? by anubi · · Score: 4, Insightful

    I would not be surprised in the least to find voice over internet protocol (VOIP) completely taking over once everyone has access to this technology.

    Who needs a cellphone carrier if they have access to the internet?

    The providers as we know them now may go back to selling buggy-whips for all I know...

    --
    "Prove all things; hold fast that which is good." [KJV: I Thessalonians 5:21]

    1. Re:Upset the industry? by Anonymous Coward · · Score: 5, Informative

      Who needs a cellphone carrier if they have access to the internet?

      To acually get to the Inernet when there is not any WiFi around?

    2. Re:Upset the industry? by K.+S.+Kyosuke · · Score: 4, Insightful

      You do realize that Africa is far from being this homogeneous place where everyone has the same problems?

      --
      Ezekiel 23:20
    3. Re:Upset the industry? by ebno-10db · · Score: 4, Insightful

      I would not be surprised in the least to find voice over internet protocol (VOIP) completely taking over once everyone has access to this technology.

      There is nothing about VoIP that's inherently cheaper than straight digitized voice streams. VoIP eats up more bandwidth (all the headers and stuff), and RF bandwidth is the most precious commodity there is in wireless. They've done a great job w/ better modulation and coding techniques, but Shannon and Nyquist are still right. Getting more RF bandwidth is great too, but there are still limits. Maybe someday we'll use mm wave for cell phones, but we're a long way from that.

      VoIP makes sense for fixed point connections where umpteen zigabit/sec (or whatever they're up to this week) makes bandwidth extremely cheap, but otherwise it sucks. And I haven't even mentioned latency requirements yet.

    4. Re:Upset the industry? by gnasher719 · · Score: 5, Insightful

      Nothing to eat, your kids are dying of some horrible disease and you can't the medicine they need, but the datacomm is improving every day! I really, really hate to admit it, but for once Bill Gates is right.

      Should be downvoted as downright stupid. If one of the three towns 20 miles footwalk away has the medicine your kid needs and the other two don't, then having a phone to find out which one can save your kid's life. People in Africa use phones to get information about markets so they can go to the right market to buy or sell things. You really can't imagine that people in bad living conditions could use the power of communication supplied by a phone to improve their living conditions?

    5. Re:Upset the industry? by ebno-10db · · Score: 5, Interesting

      First "someone" isn't enough. It needs to be someone sufficiently educated.

      Yes, it's called a virtuous cycle. Educate some people, they can teach more people, etc. It's worked pretty well for thousands of years.

      And you need one for about every 30 children or so. And if you are unlucky, all you get out of it is maybe 10 educated people, the others either can't attend, at least not regularly, get too sick, die, ...

      That was my point about people needing enough to eat and being in good enough health to learn something.

      It is incredibly expensive ...

      Labor rates are pretty cheap there.

      simply doesn't scale and as a result in general just does not happen

      That must explain why, for example, in colonial America most people were illiterate. Oh, wait, the American colonies were known for having a very high literacy rate, and people from the mother country who came here were amazed at not just the literacy rate, even amongst the poor, but how well read and informed many of them were. And it was done with, wait for this, drum roll ... one room school houses. Apparently some of the people who learned there, got a little more education, and then taught in other schools. It was amazing! I forgot to add: they didn't have cell phones or the Internet. Apparently they thought indoor plumbing was a higher priority. Such ignorant fools!

      Even in 21st century America cell phones, the Internet, laptops, etc. have done remarkably little to improve education. Do you know that when TV first came along they thought it would be a great educational tool. Long distance classes and so forth may be great at a college level, but do you really think that'll work for a bunch of grade school kids? Maybe when they improve image recognition enough so that it can figure out whether little Bobby in the back needs to go #1 or #2.

  2. Upset the industry? by Anonymous Coward · · Score: 4, Interesting

    Except in places where data is limited to a fault, ie anywhere that isn't urban america and/or some other afluent cities (like London). Same reason why SDCards aren't going to die for android, as much as google might want you to stream your music it just isn't possible and a sub 2gig plan. Even then it's still stupid. So long as there are stupid caps to the level of data that companies will give people nothing like this will take off. Take my plan for example. I live in Australia and all the plans from every comapny around $30AUS a month have about 200-400 MB worht of data. to get anything worth while you have to go up to $60 a month which for a lot of people isn't something they can do. It's similarly shitty in a lot of other countries too

  3. Solar power and diesel generators. by WegianWarrior · · Score: 4, Informative

    While I can't comment on the third world in general, I saw a lot of solar cell setups for charging cell phones in South Sudan - people even ran solar charging as a business; a solar panel, some car batteries, a black box of electronics and 3 to 5 South Sudanese pound for a full charge.
    Also saw plenty of cell towers with solar panels and battery banks, with diesel generators for backup. Not as clean or tidy as plugging into the grid, granted... but it works. Was a life line for me for a year spent down there, and twice so for the people who lives their whole life there.
    Just because you can't plug something into a national grid, don't mean you can't get power... often cheaper and more reliable than the grid too - at least in Juba.

    --
    Everything in the world is controlled by a small, evil group to which, unfortunately, no one you know belongs.
  4. Sigh by ledow · · Score: 4, Insightful

    What else, precisely, were you expecting?

    That we all continue to pay for the latest-and-greatest no matter what for ever and ever? Smartphones are plateauing, like any other technology. They are now so ubiquitous that there's little point spending a fortune for something that can do the same, but "slightly faster" or with more megapixels, or whatever.

    Sure, there are evolutions, and merges of technology, and lots of new developments still to come but if the phones don't have something new, then they are all just the same as each other, give or take a few statistics here or there.

    Smartphones beat out ordinary mobile phones, that's for sure, but it was a long while coming. Tablets are in the same place at the moment - they are powerful enough to run almost anything and so there's little to distinguish them except for company name and some random technical specifications.

    Welcome to the era of ubiquitous computing, where my mobile phone can plot a course across Europe, suck down traffic data and tell people on Facebook when I'm going to arrive quicker than I could do it myself on a full PC. While also handling all my calls, monitoring my car engine, checking my Exchange accounts, etc.

    The problem we have now is not pricing - the cost of something going down is rarely a problem for the consumers or the manufacturers and their suppliers. The problem we have now is what comes next? We all have Turing-capable machines that run at stupendous speeds, and most of us actually have several. The question is how do you design your services to take account of this - TV streaming, etc. is still in its infancy and pretty much in denial at the moment.

    1. Re:Sigh by ebno-10db · · Score: 5, Interesting

      You're absolutely right, but in addition to that the cellphone business (smart or dumb) has always been a crazy business to be in, even crazier than PC/laptop's. There it was about price, so the change was always slower and smoother (might take 5 years to be put out of business).

      The cellphone biz is insane. Remember when Nokia was king of the hill? Blackberry, Motorola, etc., etc. It's probably better business to be a component supplier. The margins may get thin as the prices go down, but it's all about performance and price. Chip sets (the RF/DSP stuff, not ARM's), displays, etc.

      Electronics: the only business where prices go down.

      I wish there were more like it. They keep telling us that inflation is low because smart phones are getting cheaper, and a pair of socks is $0.05 cheaper because they're now made in a country where people earn $2/day instead of $3. Never mind that nobody can afford medical insurance (yes, before Obamacare too, w/ double-digit inflation), and going to college (let alone grad school) means mortgaging your children's children.

      Here's one for you who complain about old fart stories. Between a partial scholarship, federal grants (yes grants, not loans, and my family was working class, not poor) and employer tuition payments (100% if you got a 'B' or better), I got my BSEE and MSEE without paying a cent in tuition. I'm not gloating, because it was not because of anything brilliant that I did. I wish we still had it because my kids are approaching college age. But inflation is low!

    2. Re:Sigh by ebno-10db · · Score: 4, Funny

      Clinton was a Democrat? Are you sure?

  5. Re:Dear google, we love sdcards , idiot CEOs by smittyoneeach · · Score: 5, Funny

    Oh to have a string! All I have is this lone integer, you insensitive clod!

    --
    Get thee glass eyes, and, like a scurvy politician, seem to see things thou dost not.--King Lear
  6. Re:Dear google, we love sdcards , idiot CEOs by Moonrazor · · Score: 5, Funny

    An integer ?! All we had was a bit! We used to dream of having an integer. Would've been like a palace for us!

    --
    Burn the land and boil the sea........
  7. WTF does that even mean? by gelfling · · Score: 5, Insightful

    Transformative? Every time some semi alcoholic blogging 'communications major' from Vassar or some such place wanders into the mall and discovers that last year's models can be had, from a third party kiosk for near-free they immediately whip out their own brand new iPhone to proclaim a Golden Age is Upon Us.

    Cheap smartphones have been around for years and years you retard. The problem is the NETWORK.

  8. What century is this article from? by Lumpy · · Score: 4, Insightful

    You have been able to get"free" or $59 or $99 smartphones for the past 5 years.
    There is nothing at all new about this, they were last year models or strip down models. EXACTLY what they are proposing.

    Next up on Slashdot we discuss something from 5 years ago as if it is going to happen soon!

    --
    Do not look at laser with remaining good eye.