We are on the cusp of total smart phone commodification

[preslove]

...
of full on smartphone commodification. I am satisfied with my Oneplus One 64gb (no invites yet ). $55 on cricket is low enough that I'm considering picking up cable tv!

1 Gig of ram doesn't really cut it, but 2gigs hould be enough to browse the web decently, and Huawai Ascend Mates have been going for $250. I saw a new Sony Z2 5" for $420 recently.

These specs should trickle down as the flagship phones come out. Another couple cycles and having a "good enough" SOC that has lte for both At&T and T-Mo and their subsidiaries/resellers, at least 2 gigs, and an ok hd screen for around $200 or less, unlocked. I don't see the need to go above 1080p, and fewer pixels means less battery drain.

The smarthphone industry is rapidly becoming the cheap ass pc industry!

Hail our new Googly overlords and their mac forefathers.

But, what does this do to the phone industry when you can get a "good enough" phone off contract instead of a flagship on contract?

 

[Ravynmagi]

Nothing, people will still keep paying $200 and a 2 year contract for the newest iPhone or Galaxy. Though I'm not sure why.

 

[poofyhairguy]

But, what does this do to the phone industry when you can get a "good enough" phone off contract instead of a flagship on contract?

I think two things will happen:

1. I think we will see the value of branding in this space. iPhones have been said to have twice the value to consumers, they might end up alone on the $199+ with contract tiers. Already Galaxy phones hold a higher secondary market value than any other Android phone- look on swappa- and I expect that this early brand start might allow them to live on as THE only "high-end" Android device (especially if they keep improving build materials).

Everyone else will fight on price, gee-whiz features, and carrier lockin.

2. Software will matter more. We are already seeing this some with both iOS and Android improving greatly the last few years. But in the Android space, many of these improvements don't carry through thanks to OEM skins.

When you look at swappa or on Ebay you notice that phones running a cleaner version of Android (Moto X1 or 2, Nexus 5, etc.) go for higher than equivalent phones that have a carrier skin. A Moto X1 almost goes for the same price as the much more power G2. The Nexus 5 (despite a smaller battery among other things) goes for 25%+ more than the G2. The Moto X2 goes for more than the S5 or M8. The reason has to be software.

I think the opening is for Chinese phone makers to come in with some pure Android phones ala the One plus One. I mean, technically it costs MORE to skin everything and develop all these extra "features." If pure Android has more value, that basically means of that extra cost is a waste which means an expense the up-and-comers won't pay.

 

[SpacemanSpiffVT]

I really don't understand why people get contract phones these days.. makes no sense but the mass market American consumer has no idea about the availability decently spec'd Huawei/motorola/Oneplus/Oppo phones. Its just easier to do the typical 2 year contract and keep it moving.

I think the downward rush of prices will take longer than you think. The next series of Snapdragon 805 phones will be $700+ just like normal.

 

[Kaido]

I miss my iPhone 4S. But iOS 7 & 8 made it slow & buggy. I would rather have my 3.5" 4S than my 4" 5S. No real desire to go with a bigger screen - I like the smaller, one-handed phones rather than the jumbo phones.

 

[Midwayman]

When you look at swappa or on Ebay you notice that phones running a cleaner version of Android (Moto X1 or 2, Nexus 5, etc.) go for higher than equivalent phones that have a carrier skin. A Moto X1 almost goes for the same price as the much more power G2. The Nexus 5 (despite a smaller battery among other things) goes for 25%+ more than the G2. The Moto X2 goes for more than the S5 or M8. The reason has to be software.

Well the Nexus brand with guaranteed updates is a big deal vs maybe someday getting the latest OS. I think its that more than just software. If you root and install cyanagen, AOSP, etc before selling you can get a few more buck for it too.

 

[Midwayman]

Contract phones are dying. All the carriers are trying their hardest to kill subsidies and push you onto a plan + monthly phone payment option. The real big thing there is you're really going to see the cost advantage of various phones. Suddenly a flagship android is a couple hundred less than an iphone. A mid-range phone even cheaper. Its going to drive a lot of people to buy cheaper (MSRP) phones and finally allow us to effectively shop elsewhere for phones. Maybe that means carrier branding of phones will finally die. That would be a huge step forward for getting timely OS updates.

 

[senseamp]

Yes, we are seeing it. Good enoughism is setting in.
1440p screens not catching on as a "must have" high end phone feature is a major recent example. 1080p is considered good enough.

 

[Ksyder]

When you look at swappa or on Ebay you notice that phones running a cleaner version of Android (Moto X1 or 2, Nexus 5, etc.) go for higher than equivalent phones that have a carrier skin. A Moto X1 almost goes for the same price as the much more power G2. The Nexus 5 (despite a smaller battery among other things) goes for 25%+ more than the G2. The Moto X2 goes for more than the S5 or M8. The reason has to be software.

Indeed this is true. I just sold a g2 and paid slightly more for a new 2013 Moto X due to the software situation. I'd also add that the form factor is better on the X, I like the size of the g2 but for day to day use I'm happier with a a smaller phone.

I also did have a nexus 5 and sold it due to feeling it was too large. IMO they are fine without a case but after adding a case they get to the point where they are too large to carry in your pocket comfortably.

 

[desura]

Naw, we're already there.

Republic Wireless phones are actually cheaper than most flip-phones on major carriers. This is with full-blown android and all.

 

[frowertr]

Contract phones are dying. All the carriers are trying their hardest to kill subsidies and push you onto a plan + monthly phone payment option. The real big thing there is you're really going to see the cost advantage of various phones. Suddenly a flagship android is a couple hundred less than an iphone. A mid-range phone even cheaper. Its going to drive a lot of people to buy cheaper (MSRP) phones and finally allow us to effectively shop elsewhere for phones. Maybe that means carrier branding of phones will finally die. That would be a huge step forward for getting timely OS updates.

I guess I don't get this. What's the big deal with signing a contract? Especially considering you get a $600+ phone for $199. If you're unhappy with your service several of the other carriers will buy out your ETF to bring you over.

Why do people want to move to monthly phone payments in addition to the service payment? I'm looking to lower my monthly bill whilst getting a new phone not increase it.

 

[preslove]

Naw, we're already there.

Republic Wireless phones are actually cheaper than most flip-phones on major carriers. This is with full-blown android and all.

http://www.cnet.com/news/is-republic-wireless-too-good-to-be-true/

Yeah, you can get a smartphone, but the service sucks. I'm on Cricket and get great coverage because it is owned by AT&T and uses their lte. It's throttled, but I get at least 3 m/s wherever I go, even in large buildings.

What's changing is the availability of phones that come free, unlocked, and compatibility with at least t-mo and att, and the many prepaid services that have sprung up.

I guess I don't get this. What's the big deal with signing a contract? Especially considering you get a $600+ phone for $199. If you're unhappy with your service several of the other carriers will buy out your ETF to bring you over.

Why do people want to move to monthly phone payments in addition to the service payment? I'm looking to lower my monthly bill whilst getting a new phone not increase it.

Because you end up with a huge monthly bill that ends up costing you a lot more. I went from $105 including tax, to $55. That's $1200 over the contract. And I get 10 gigs per month!

Why not just buy the phone outright? Moore's law and firm competition is driving smartphones into the "good enough" area that PCs have been operating in for a long time.

 

[desura]

I use Republic. The coverage is fine. The main complaint most people had was that it was too aggressive switching from wifi to cellular.

 

[frowertr]

Because you end up with a huge monthly bill that ends up costing you a lot more. I went from $105 including tax, to $55. That's $1200 over the contract. And I get 10 gigs per month!

Why not just buy the phone outright? Moore's law and firm competition is driving smartphones into the "good enough" area that PCs have been operating in for a long time.

Well I ran the numbers with Sprint (who I have) and it is $17 more a month for me stay out of contract but make payments over a 24 month period for a new phone (ran the numbers on a Note 4 which is $30/month) with their $60 Unlimited Plan. It's basically $90/month plus taxes and fees. Right now I'm at $87/month with all fees and taxes included.

So basically it costs about $200 more over the course of two years to not sign a two-year contract. I guess since we are talking so little money here it's six and half-dozen the other for me anyway...

 

[Midwayman]

I guess I don't get this. What's the big deal with signing a contract? Especially considering you get a $600+ phone for $199. If you're unhappy with your service several of the other carriers will buy out your ETF to bring you over.

Why do people want to move to monthly phone payments in addition to the service payment? I'm looking to lower my monthly bill whilst getting a new phone not increase it.

I don't know its consumers driving it as much as it is the carriers. They put out big subsidies to get people hooked on data plans and now want to try and eliminate them.

However that $600 phone isn't really $200. You're paying for it through higher rates. If you look the things like ATT next you'll even see that not having a contract phone can save you $15-25 a month. That's 360-600. Coindidently that's about what the ETF was on the low end, or approximately what your subsidy is costing.

Getting out of the subsidies means lots of good things. Like you can use a MVNO for far cheaper rates. You can move carriers on a whim if one starts bad practices. The phones you buy will likely be unlocked for use overseas. Phones can easily be bought at places other than your carrier store creating price competition on phones, ultimately lowering hardware costs. It also means your phone much more likely be the international version which doesn't have dumb stuff turned off on it, carrier spyware, etc.

Lots to like. If you don't like paying up front for your phone, just look at the UK's market. That's what our future looks like. You pay for service, and then a variable monthly amount for your phone if you don't buy it outright. Tmobile is already there. ATT is there, but has the contract option. I think verizon has something similar (not a vzw guy)

 

[Midwayman]

Well I ran the numbers with Sprint (who I have) and it is $17 more a month for me stay out of contract but make payments over a 24 month period for a new phone (ran the numbers on a Note 4 which is $30/month) with their $60 Unlimited Plan. It's basically $90/month plus taxes and fees. Right now I'm at $87/month with all fees and taxes included.

So basically it costs about $200 more over the course of two years to not sign a two-year contract. I guess since we are talking so little money here it's six and half-dozen the other for me anyway...

The problem there is you're paying MSRP on the phone and then choosing to use a post paid carrier. Not the way to do it. You need to pick up the phone from someone who will discount. (way easier with the GSM carriers.)

 

[Trombe]

Still sorta depends, a lot of people on grandfathered plans (especially those with family plans) are better off continuing with resigning under the same terms than jumping ship to an MVNO unless they don't plan on upgrading again at all.

 

[Midwayman]

Still sorta depends, a lot of people on grandfathered plans (especially those with family plans) are better off continuing with resigning under the same terms than jumping ship to an MVNO unless they don't plan on upgrading again at all.

With legacy plans YMMV. However they could discontinue those any time, refuse to give you discounted upgrades, etc, etc. Really only possible to talk about current plans.

 

[sm625]

It's already there. For a year now, I been using a ZTE supreme, which is a $150 phone that has a 5" display, 4G, and a 3200 mah battery. It has everything I want and none of the superfluous crap that no one needs (ie 4 /8 cores and 1080p+ resolution) And it only costs $10 month for 100 minutes and 100MB of data.

Just dont tell this to the people who love to drop $800 a year on iCrap X, and then bend over to the tune of around $60-$100 a month for their rate plan. At some point all those people who are dropping nearly two grand a year on a frackin phone are going to realize they've been had.

 

[Red Storm]

It's already there. For a year now, I been using a ZTE supreme, which is a $150 phone that has a 5" display, 4G, and a 3200 mah battery. It has everything I want and none of the superfluous crap that no one needs (ie 4 /8 cores and 1080p+ resolution) And it only costs $10 month for 100 minutes and 100MB of data.

Just dont tell this to the people who love to drop $800 a year on iCrap X, and then bend over to the tune of around $60-$100 a month for their rate plan. At some point all those people who are dropping nearly two grand a year on a frackin phone are going to realize they've been had.

100MB of data is nothing, I can eat through that in one lunch break. I mostly agree with you regarding the hardware, buying super expensive phones just isn't worth it for those who will be keeping it long term, but some of us need and use a good amount of data every month.

I'm waiting for my Nexus 6 to arrive so that I can try it out with RedPocket Mobile's data only sim card. $10/month for 1GB of data. If I can make and receive calls via Hangouts with no issue then I'm good to go, but for now I still have my line with T-Mobile.

 

[StrangerGuy]

Mark my words, 2015 will be the year of Chinese super-budget phones for <$200 with quadcore 64-bit A53s, 2GB RAM, 1080p screens, 13MP cameras as baseline specs. Performance will be so good with Lollipop ART that most will ask themselves "Why even buy a high-end Android?"

We might even see established players like Samsung dropping out of developing markets altogether as a response.

 

[Ramses]

None of you gentlemen are wrong, but don't forget the entire reason for debt from cc's and mortgages and such in the first place.

There are a TON more people, the majority, that have $200 and enough credit to get a big new wizz-bang (i)phone on contract just by hopping into one of the ever present sprint or vzw stores or whatever, then there are with $600+ free to spend and then look into more economical carriers.
Look at how many new activations vzw had last year for example, even when there are more and better cheap/good off contract phones than ever right now. It's a human thing. Emotion/convenience over logic.

 

[poofyhairguy]

None of you gentlemen are wrong, but don't forget the entire reason for debt from cc's and mortgages and such in the first place.

There are a TON more people, the majority, that have $200 and enough credit to get a big new wizz-bang (i)phone on contract just by hopping into one of the ever present sprint or vzw stores or whatever, then there are with $600+ free to spend and then look into more economical carriers.

Yeah, but what happens when a $200 off contract phone becomes "good enough?" Then that money can go either way.

 

[rh71]

Because you end up with a huge monthly bill that ends up costing you a lot more. I went from $105 including tax, to $55. That's $1200 over the contract. And I get 10 gigs per month!

Why not just buy the phone outright? Moore's law and firm competition is driving smartphones into the "good enough" area that PCs have been operating in for a long time.

I'm trying to figure this out for our situation. I'm on a 550 share-minutes plan - myself with minutes & 6gb data and my brother with just minutes/text, for $85 after taxes. We can't BOTH have our plans for less than that total on a prepaid can we? If it's equal, then the $199 for my subsidized phone still wins out.

That is why I gave up my unlimited data to continue my 2-year subsidized phone plan and went with the 6GB for the same $30/mo. data rate.

Please tell me if we can do better (don't need unlimited, or more than 3GB really).

 

[Midwayman]

Yeah, but what happens when a $200 off contract phone becomes "good enough?" Then that money can go either way.

I sort of wonder if they'll start making intentionally shitty mid-range phones. Not just dropping down last years flag ships, but withholding features for no reason but to make you pay for the higher model. Lots of mature industries seem to go that route.