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Validity of New Feature Phone Market

Do hardware vendors even want to play in the low-cost market?
2/27/2014 08:40 PM EST
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daleste
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Predictions
daleste   2/27/2014 9:57:58 PM
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Interesting prediction of the future market.  I guess I would expect that the results will be different.  I dont' expect windows, blackberry or others to do that good.  There may be an Others that will do good, but it would have to be a break out.

AZskibum
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Re: Predictions
AZskibum   2/28/2014 12:50:59 AM
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Clearly there is a lot of demand in developing nations for low cost phones that can connect to the internet, but I'm curious how the data pricing tiers play into that. Is data not a premium service compared to voice in the developing world as it is in the industrialized nations?

junko.yoshida
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Re: Predictions
junko.yoshida   2/28/2014 1:36:05 AM
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Let me find out, as the data plan in the emerging market seems to be a recurring question in our community.

Pablo Valerio
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Re: Predictions
Pablo Valerio   2/28/2014 4:01:27 AM
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The issue of the data plan cost has been one of the main discussions at the MWC. In most developing markets people use pre-paid cards, and data is very expensive to them. But most of them are using feature phones.

Facebook is working with Gemalto offiering basic FB experience on feature phones by special SIM cards with SMS packages. They want people to experience the social network and move to a smartphone, and carriers are happy to help to get new data customers. This model is already working in countries such as Morocco, Colombia and Chile.

But the data plan cost is not only an issue in developing markets. Here in Spain many people do not have a data plan for their smartphones, and try to connect only by wi-fi. Since basic free Wi-Fi is available in many cities they just jump from hotspot to hotspot and get a connection.

 

Anand.Yaligar
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Re: Predictions
Anand.Yaligar   2/28/2014 1:37:15 PM
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Is data not a premium service compared to voice in the developing world as it is in the industrialized nations?

@AZskibum, I am regular user of mobile internet. I pay 2$ for 1GB of data on postpaid connection. But prices for 3G services are much higher compared to the 2G services.

shusan
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Re: Predictions
shusan   2/28/2014 7:37:32 AM
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You're so cool! I do not think I've read something like this before. So nice to find somebody by incorporating authentic ideas on this subject. I really appreciate you for starting this

chanj0
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Smartphone vs Computer
chanj0   2/28/2014 3:13:14 AM
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"Seriously, no one wants a $100 PC now."

The above statement may be true. However, the original idea of having low cost computer is not only for studying and information sharing but also for learning programming. As of today, neither smartphone nor any tablet devices is the right platform to do so. Most apps are indeed developed on a computer (either Mac or PC) and download it to the device for testing before submitted to the store.

To fill the gap of learning programming, maybe, there should be an apps that link to a virtual platform of a programming language. ;)

wilber_xbox
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Re: Smartphone vs Computer
wilber_xbox   2/28/2014 3:39:13 AM
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cloud is the right answer to fill this gap. Today we are building and maybe testing apps on laptop, PC or servers but what if all the processor load can be shifted to cloud servers and a developer can just write the app on tablet and present it.

chanj0
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Re: Smartphone vs Computer
chanj0   2/28/2014 12:06:33 PM
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Absolutely. Python and Perl already have cloud platform. I wonder whether there is any platform to support low level language such as C/C++. The availability of iOS SDK would be nice, wouldn't it?

zewde yeraswork
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Re: Smartphone vs Computer
zewde yeraswork   2/28/2014 10:09:30 AM
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Low cost is preferable to entire geographical areas and market segments in the overall industry. I don't know that we'll ever see sub 100 dollar PCs, or what that would look like exactly, but the demand for it would be there if someone could afford to make it.

Anand.Yaligar
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Re: Smartphone vs Computer
Anand.Yaligar   2/28/2014 1:17:34 PM
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I don't know that we'll ever see sub 100 dollar PCs, or what that would look like exactly, but the demand for it would be there if someone could afford to make it.

@zewde, I dont think there will be demand for sub 100 dollors PCs because it will have very minimal feature. I think its better to buy sub 100 dollor tablet than buy sub 100 dollor PC.

prabhakar_deosthali
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prabhakar_deosthali   2/28/2014 5:02:22 AM
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As the focus shifts to Cloud and a high spped network, there won't be any need for smart phones. The simple feature phones with a better display screen would be able to achieve the same perfromance what a smart phone of today would do.

 

So Firefox seems to have this vision while bringing their $25 phone.

 

zewde yeraswork
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zewde yeraswork   2/28/2014 10:06:50 AM
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I would think that as the cloud expands and develops the need for smartphones of a variety of calibers will also assert itself more and more. But that's not a real certainty. The cloud throws the entire smartphone market for a loop--it makes everything sort of questionable.

chanj0
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re:
chanj0   2/28/2014 12:03:27 PM
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The challenge of throwing everything to the cloud is the wireless bandwidth has to be able to support the massive users using the service.

AZskibum
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re:
AZskibum   2/28/2014 12:42:33 PM
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The challenges are both technical & economic. As you said, there is the need for the wireless bandwidth to handle large numbers of users, but there is also the issue of the cost for them to use that bandwidth. The concept of a very low-cost phone that relies heavily on the cloud is somewhat at odds with the availability & cost of using the cloud in developing nations. To some degree, it is an example of putting the cart before the horse.

Anand.Yaligar
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Re : Validity of New Feature Phone Market
Anand.Yaligar   2/28/2014 1:30:14 PM
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The simple feature phones with a better display screen would be able to achieve the same perfromance what a smart phone of today would do

@prabhakar, I totally agree with your opinion. I think eventually we will see feature phones with better hardware features which will give users very good alternative to the smartphones.

Anand.Yaligar
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Re : Validity of New Feature Phone Market
Anand.Yaligar   2/28/2014 1:07:05 PM
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@Junko, thanks for the post. Any particular reason why there is such a steep fall in the ASP of Android and Windows OS based mobiles ?

junko.yoshida
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Re: Re : Validity of New Feature Phone Market
junko.yoshida   2/28/2014 2:17:41 PM
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@Anand, that's a good question. I don't know what's going on with Windows phone, but as long as Android phones are concerned, that's exactly where they need to go if they are to proliferate in what used to be the feature phone terrritory.

betajet
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Re: Re : Validity of New Feature Phone Market
betajet   2/28/2014 2:50:07 PM
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JMO: I would say that Android phones will keep getting cheaper because there are so many competitors.  Microsoft has to drop prices to compete with Android or their market share goes pffft.  Apple can keep coming out with new models with incremental improvements and charge the same high prices, and their fans customers will keep coming back because you're not "cool" unless you have the latest model.  The fact that they cost more makes them "cooler".

JMO/YMMV

Anand.Yaligar
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Re: Re : Validity of New Feature Phone Market
Anand.Yaligar   2/28/2014 4:11:51 PM
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@betajet, I agree with your opinion. Why do you think people will buy feature phone for 170$ when they can buy a smartphone by paying 30$ more ?

junko.yoshida
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Re: Re : Validity of New Feature Phone Market
junko.yoshida   2/28/2014 6:26:37 PM
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@betajet, agreed. Definitely a large number of Android community and tougher competition will contribute to the lower price. 

That said, it may be the time for Android-based hardware developers to start looking for something else to differentiate their handsets.

alex_m1
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Re: Re : Validity of New Feature Phone Market
alex_m1   3/1/2014 5:58:58 PM
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I don't get why the big wow is about. Yes firefox uses lower memory, but the difference between that and a low end android phone(256MB ram and extra 2GB) is less than $5(according to DramExchange). Assuming the $25 is BOM we're talking about less than 20% difference.


Also, previous versions of android we're targeted at low memory and there are many apps highly optimized for low resources. For example opera mini(which is so light it can even run on feature phones), and FB plus for facebook, a facebook app that takes only 121k, Not forgetting the huge app ecosystem android have which some of it could be usefull for these phones.

So until a decent comparison is made between FirefoxOS and a well optimizised low end android phone, i prefer to stay skeptical.

GSMD
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Re: Re : Validity of New Feature Phone Market
GSMD   3/2/2014 6:06:05 PM
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I have to agree with alex_m1 here.

This whole feature phone vs smarphone and firefoxphone vs android is a bit of a redherring. It is better to examine the capacity of the USD25 HW and figure out what can run on it.

Back in 2006 when I demo'ed a concept phone platform at the MWC, 500 Mhz ARM11, a VGA display and 128MB of DDR was sufficient to run our variant of the  Opie platform, a Linux + Qt combo. Same Linux + Qt combo (which is what Tizen and Jolla's platform are at their core) runs well in a 500 Mhz Cortex 8 + 256 MB DDR2 today (I use this combo in OMAP3 processor based banking terminals running Linux apps).

The Spreadtrum platform is more powerful than this since an A7 will be faster than a A8.

Even an A5 is no slouch either.

Last time I checked a dual Cortex A9 combo with audio codec IC and power mgmt IC sold for USD7. A version with BB should probably be 10 for 2G. And these are at 10k volumes for a dual Cortex A9 that can run a 10 in tablet (I advise a mobile OEM, so these figures are accurate). A7 based parts will be cheaper since A7 is more optimal. Higher volumes prices on A5s and A7s can be significantly cheaper.

This will let it run a good optimized linux based applications, whether it be android, Qt or a run-time of your choice. Android may a little resource hungry but  will take only a little more memory with probably another 200Mhz. In fact if I am not mistaken this HW is not too far from the original iPhone or Droid HW. Display quality will be poorer of course.

So as alex_m1 pointed out probably another USD5 in BOM.  Assuming a generous 8% manufacturing cost, 40c extra for manufacturing. So we are talking about a USD6 spread.

So the vast price difference between a so called feature phone platform and an optimized android platform is a myth. The product price difference is due to positioning of the devices by the OEMs rather than indicative of major HW costs.

This implies that the mobile world is heading the PC way. For a vast majority of users, the low cost platform's capability has reached what a typical user wants. So faster CPUs buy you nothing other than greater battery life. And the everage user plays angry birds not a mobile version of an arcade game at 1080p resolution. Only component that has not reached commodity levels is good 720p/1080p displays. 4.5-5.5 in parts are still expensive and let us face it, for the vast majority of the users that this firefoxphone is aimed at, the phone will be primary internet device and a large display really counts.

 

alex_m1
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Re: Re : Validity of New Feature Phone Market
alex_m1   3/1/2014 6:11:21 PM
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Here's an interesting and detailed examination of the firefox phone:

http://www.digitimes.com/news/a20140225VL200.html

Their conclusion is that it won't lead to a big difference in current prices.

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