Android to Leapfrog iPhone, Nokia, Windows Phone 7 with $50 Smartphones

 
 
By Wayne Rash  |  Posted 2010-11-10
 
 
 

Android to Leapfrog iPhone, Nokia, Windows Phone 7 with $50 Smartphones


Verizon Wireless's announcement that it's releasing a new Android smartphone that will sell for less than $50 ups the competition in ways that Apple can't meet. As Clint Boulton points out in his story, the low price point will bring these devices to customers who would never before have been iPhone buyers. But Verizon isn't the only carrier bringing out new low-priced Android phones. 

On November 1, T-Mobile announced four Android phones from three manufacturers, including two from Motorola, which also cost less than $50. One of them, the T-Mobile Comet, will sell for under $10 with a two-year contract after a rebate.  

When Android phones start selling for $10, the market is opened up to a whole new set of users. These are people who might never have considered a smartphone before because they believed they were priced so that only the well-to-do could afford them. 

Now, however, Android devices are creating a great democratization-anyone who wants a smartphone can afford one, and they can afford most of the thousands of free or low-cost apps that are offered on the Android Market. Of course, these devices all require a data plan, but T-Mobile and Verizon Wireless are also creating new low-cost data plans for people that buy these phones-some of which start as low as $10 a month.  

This is a whole new market for smartphones, and, so far, it's strictly an Android market. While there are plenty of cell phones out there in this price range, some even with smartphone-like features, this is a whole new approach to the smartphone market.  

It means that, while the buyers of these devices might not get the latest version of the Android OS, and they probably won't get the high-speed processors and large quantities of application memory, they'll still have an Android phone that can do most of the things that any other Android device can do. 

Contrarily, the iPhone is aimed primarily at the elite users who can afford its high price and the expensive (and no longer unlimited) AT&T data plans. While there's no question that the iPhone hardware is technically superior to these new low-cost Android devices-at least as long as you're not counting the antenna-the new devices are reaching vast numbers of people that the iPhone will never reach. 

Android Could Overtake Nokia in 2011


 

When one considers the global impact of this scenario, it's easy to see that it is a huge coup for Android. Many smartphone users in the U.S. are not primarily motivated by price, but, in parts of the world that aren't as affluent, a smartphone for the masses can make a huge difference in commerce and access to knowledge-something that the iPhone and its base of elite users will never know. 

Because of Verizon Wireless's broad reach in the U.S. and T-Mobile's global reach, low-priced Android smartphones are more than just an interesting idea for Christmas. Devices such as these can transform how business is done everywhere. 

Cell phones have already been a major business influence beyond the confines of the U.S. and Western Europe-from allowing market pricing for fishermen as they bring in their day's catch to providing communications for small businesses that previously depended on foot traffic. Imagine now how a truly low-cost smartphone might further transform such businesses. 

None of this is to suggest that the iPhone and its high-priced competition are the wrong choice for companies; it's just that it's not the right choice for everyone. As new access to information and services using smartphones becomes wide spread, it will change lives in many ways, from providing such routine information as local bus arrival times to the ability to search for a merchant that handles the products you are in need of. These capabilities are already available to most of the smartphone market, but, until now, many people have been frozen out of that market. Not anymore. 

So, how does all this account for Android blowing past iOS devices this year, and Nokia perhaps next year? It's fairly obvious. Once you open up a new, very large market, and create the resulting demand, you're going to sell a lot of smartphones.  

Nokia has had the edge in global markets for a long time, mainly because it sells a lot of inexpensive phones everywhere in the world. But its smartphones aren't particularly cheap. These new Android phones are very inexpensive and they will no doubt satisfy what is sure to be a huge, unsatisfied, demand for such devices. Apple doesn't stand a chance here, unless it finds a way to be something besides the phone for the elite. There's a great big world out there ready to be connected, and these low-cost smartphones might just be the way to do it.


Rocket Fuel