The realities of a $50 smartphone | Hacker News Reader

The realities of a $50 smartphone

engadget.com

33 pointsPamar50 comments

So make the $100 device and get governments to subsidise them, you could give a hundred million $50 subsidies for $5bn (or more like 7-8bn once you get the pork and ancillary costs out the way).

Access to the internet and even feature phones has radically altered lives around the world.

Who pays the subsidies? The most obvious would be the target country, but I suspect that the reasons that make those the best recipients of the phone are the same reasons why the government wouldn't be able/willing to subsidize.

There are plenty of android phones available for around $50 now. No need to subsidize. For example: http://www.amazon.com/BLU-S410a-Unlocked-Smartphone-Touchscr...

Right $50 means a 4" screen and 2-4 year old hardware. It might not be glamorous but it damn well ought to be able to browse the internet and run an office suite.

I have a 5 year old laptop crawling on its knees when browsing Wired and some other sites heavily loaded with way too much JS and subsequent http calls.

XP+office 2010+20ff tabs are running fine on it but forget about win7/8.x and more than 2 tabs.

I regularly scan for second hand Motorola smartphones, like Moto G 2013.

see http://chicago.craigslist.org/search/sss?excats=20-102-41-27...

I didn't read the details, but lots of ~40$ ones. A 1st gen Moto G is very potent.

Yep. I've seen occasional blowout sales on older models in the $20 range.

http://www.aliexpress.com/item/1GB-8GB-Version-Teclast-X70-3... was 15% of a couple of days ago..

This is still a thing? Now I'm curious; what did it cost Nokia to build the Lumia 520 (or 521) that I paid $35 for new from ATT about a year ago (no plan/no strings, since unlocked for free) and just read this article on.

And just to inform HN readers who may have no realistic concept of what kind of personal financial decisions are made by people that these phones specifically target...

Dual SIM phones are big sellers in developing countries, so add another $1 for that or whatever (note that it's mentioned in the "Display: $8" photo of the Android One but not in the article). Dual SIMs aren't for the globe trotters out there, although very useful in my experience, but many if not most of these people will be on prepaid plans and without phone credits at times. The dual SIMs let users leverage different promotional calling/texting structures to reduce costs. As well, data for prepaid users is purchased in blocks of data size or time, so being able to switch off the connection to one SIM or the other offers another cost management tool.

$2.10 for a battery, eh? Well aren't we getting shafted for replacements.

I suspect there's a vast difference in quality between the batteries used here and those used in, say, the iPhone 6. I might be naive, but I doubt that Apple is gouging consumers that badly.

For $2.10, the battery certainly won't be state of the art. Probably bulky and low capacity.

I've worked as customer service at one of these budget phone companies before. The batteries are decent — I've had my fair share of battery bloating for certain models, but the battery life is definitely comparable to the bigger brands.

> the battery life is definitely comparable to the bigger brands

Sure, but the budget phone also isn't pushing a quad HD screen and a beefy processor. The runtime may be similar, but that doesn't mean the capacity is.

I did a quick straw poll by looking at some budget Android phones against some flagships and it seems like the budget batteries are about 1000mAh less than the flagships. In a bigger case. So, bulky and low capacity.

> it seems like the budget batteries are about 1000mAh less than the flagships

But the flagships I'm aware of have non-removable batteries which is not a fair comparison as swap-ability has pay offs that make up for all the plastic and more robust circuit designs.

Absolutely, I didn't mean to compare the relative merits, simply the costs.

> Sure, but the budget phone also isn't pushing a quad HD screen and a beefy processor. The runtime may be similar, but that doesn't mean the capacity is.

You're right.

I'm not sure how much variance LiPo technology has when it comes down to cost vs quality though. We're arguably paying for better battery QC, but I haven't read a news article about someone being injured from a battery exploding in a budget phone.

Third party battery replacements can be purchased for ~$10 or less for most phones. With first party batteries you're mostly paying for a warranty, maybe a higher quality battery, and nicer packaging.

Amazing what 50 bucks can buy.

Are smartphone manufacturers really as naive as the story suggests, churning out phones at a loss in the vain hope of future profit? I know they're in trouble but they're not THAT deluded, are they?

The one who makes most of the profit in this case is Google, be it Play Store revenue, or data collected. I'm actually beginning to feel bad for the Android vendors.

> The one who makes most of the profit in this case is Google

And Microsoft do who basically gets money on every Samsung and HTC Android device because patents.

And let's wait the conclusion of Google vs Oracle case, it might be a game changer. If Oracle wins , it won't be so easy anymore for Google.

I really hope that the Oracle VS Google thing might encourage Google to release a new official language for Android that is not Java.

I'm surprised Google hasn't made a bigger push with Go on Android. It seems like there's some rudimentary support, so maybe it's on the way.

>I'm actually beginning to feel bad for the Android vendors.

I don't, I think I paid a fair price for my smartphone (LG-D280f) considering all the crap it comes bundle with (which I can't uninstall) and that I'll never get operating system updates. Even so I still like LG smartphones. I even recommend this brand!

I'm curious how many owners of these sub-$50 phones actually go on to purchase stuff on the Play Store.

I was extremely surprised to see LG's profit margin being as low as 1.2c per device. That would be a poor profit margin for a chocolate bar, let alone a smartphone. That is obviously not sustainable.

Margins in consumer electronics are typically razor thin, particularly when the device in question is a commodity (mid-tier Android phones, for example).

1.2c is obviously unsustainable, as you mention. I wonder if they got blindsided by a price increase on some part.

How can these be razor thin and 1.2c when a trip to the local shops and the internet shows variations in the 10€ range for the same models ?

Because the price the store charges you is not the price the manufacturer charges the store.

It costs LG $10, they sell it to Best-WalGet for $10.012. the price range you see is depending on how much it gets marked up for retail.

These phones use parts and designs that have already been paid for, and they are produced in a competitive market. So it's not surprising that the unit cost to the consumer approaches the cost of production.

Once the BOM gets down into the low teens ( USD ) selling them at $50 is not unreasonable. It's not a glamorous high margin business like Apple; it's a low-margin high volume business like Walmart.

I wonder what sorts of social networks they will enable?

> As mobile networks kill off phone subsidies, users might now begin to appreciate just how much their new smartphone really costs.

The article doesn't really speak about Apple, but Apple has a much bigger problem than Android. How many people are going to pay 800$ for a hand phone + cost of data plan ?

This might be a huge opportunity for Microsoft and WP but they need to up their game when it comes to the qualities of apps. I also strongly believe that if WP sdk was supported on Mac and Linux it would have been a bigger hit. But that's my opinion.

> How many people are going to pay 800$ for a hand phone + cost of data plan ?

Depending how much you value your time, privacy and what you get for the money.

Lets be honest, the only reason Google, FB and similar companies are racing for the next 6 billion people without phones/internet to subsidize them one is to get their data.

If price was the only determining factor in which device people buy, then Apple wouldn't be able to shift $2000 laptops when there are plenty of $250 options. The reality is a lot more complicated, and I suspect Apple will continue to do absolutely fine.

But Apple doesn't shift that many 2000$ laptops , and laptops aren't a fashion accessory unlike cellphones. Most Macs aren't subsidized either.

I wonder how many of those laptops are paid for by employers? Most of the people I know who pay for their own laptops do not have Apples.

The carriers the previously offered phone subsidies are more than happy to offer financing (typically at 0%) for the cost of phones now. Nobody has to spend $800 up front if they don't want to.

>This might be a huge opportunity for Microsoft and WP but they need to up their game when it comes to the qualities of apps.

That ship sailed a long time ago. I think it's is more probable that I become a millionaire (which won't happen), than for WP to become a significant player in the mobile market. Once a platform starts running software from the competition you know it's game over. WP won't be more successful than OS/2.

> This might be a huge opportunity for Microsoft and WP

On the contrary, they've been trying to penetrate the developing market for some time. In fact, the low-end Lumias are almost uniformly better than Android devices in the same price range.

Apps are an issue, but that brings us to the chicken-egg problem of customers and apps.

> Apps are an issue, but that brings us to the chicken-egg problem of customers and apps.

Apps are not a issue. There are under 1000 must have apps. Pay each company $1M to port it and support it on the platform and you have competitive ecosystem for less than the rounding error of MS revenue.

They did that. And then those companies never updated the apps.

I develop on Android for a local business company. In my experience, I have worked with a wide range of devices and most of them have specific problems or bugs documented on internet. Most company use low-cost hardware (it is not well supported or it is not accurate) or customize Android system in strange ways: the result are bugs. So I am glad to reduce price, but I don't want to reduce the quality.

This is awesome, as long as it actually gives these people access to the internet rather than to the monstrosity that is internet.org

You can get an iPhone 4 for around $50. Seems like a perfectly adequate smartphone to me.

Can you still buy them newly produced, or is that the cost for old inventory? I believe it's the latter, which is an artificially low cost- it doesn't reflect the cost of manufacturing, but rather is the highest price that the market will pay for an outdated phone that phone companies already have in inventory.

Not to mention, Apple products past three generations are unusable. My old iPhone 4S phone is so slow that it's practically unusable.

Why is that? I booted up an old iPod touch that was based on the iPhone 4 and that thing is unusable. I would have thought it would degrade gracefully and still run as performant as it did with the old software on it but it runs so slow it's unusable.

https://en.wikipedia.org/wiki/Planned_obsolescence

Probably not even new old-stock iPhones, but actually used ones.

I wonder if e-cycling old high-end devices by refurbishing them and selling them to low-income markets isn't a better choice than ramping up manufacturing on necessarily crappy phones.

$50

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