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General Hardware Scoops + Reviews

Dear Carriers, Give Us More Deals Like Optimus V.

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Smartphone carriers have always tried to attack both the high-end and the low-end market, with $ 200 iPhones and EVOs sitting right next to free Optimus Ones and Cliqs. The strategy may work for UK and other nations that have tiered plans and no 2-year contracts, but it obviously doesn’t work for the U.S., where carrier subsidies (and good deals from Amazon) basically equalized the price of low-end and high-end smartphone with iPhone excepted. For instance, who would pay $ 50 for Optimus S when you can get Atrix 4G for $ 100 from Amazon? Especially when Atrix has CPU that’s almost four times faster than the one in Optimus, not to mention that Atrix has bigger (and better) screen as well? Customers obviously are not blind, as seen in the list of bestseller phones from Amazon, where Top 25 feature no “budget” smartphones.

Then where’s the room for low-end smartphones? Well, look no further than Metro PCS, Virgin Mobile, and other regional/MVNO carriers. Optimus One line of phones as well as dumbed-down Galaxy line of phones have invaded MVNO carriers for months, launching at price that’s no higher than regular smartphones (around $ 200-$ 300) but with a plan that costs far less than that of national carriers. Optimus V is a great example. The phone launched in February of this year, at low price of $ 150 (at $ 200 now) and the plan that only cost $ 25, and the reception has been outstanding.  Users gave the phone 4.7 out of 5. It received editor’s choice award from PC Mag. BNET called the phone “perfect pick for cash-strapped business owners who crave smartphone power.” Seriously, the praise for the phone can fill up the entire phone book at this point. While the phone itself is just a budget smartphone that can’t compare to EVOs and Droids, its relatively cheap off-contract price and cheap plan definitely became a selling point for many people, especially those first-time smartphone users.

What Optimus V speak about the smartphone market is that cheap price doesn’t matter, it’s the cheap plan that matters. With Virgin Mobile’s plan, one can easily use a smartphone for a price lower than even regular featurephone (24 month – Optimus V: $ 800, LG Cosmos Touch from Verizon with 450 minutes – $ 1040). And with lot of MVNO carriers using cellular towers from national carriers, reception and call quality have been thrown out of the question also. So, budget-conscious users, like me, can finally consider moving to MVNO carriers, with solid phones and cheap, yet feature-packed and reliable plans. Especially if AT&T/T-Mobile merger drives the cost of plan up, those in a financial pinch basically have no choice but to move to prepaid carriers.

This is why carriers should seriously consider developing another plan for low-cost smartphones, especially when data clearly shows that those with budget smartphone uses less data than those with premium smartphones. While data tiered plan lessened financial burden on those who use very little data (not many, FWIW), it has not done enough to lower the overall cost of owning even a low-end smartphones in national carriers. What I recommend would be this:

  • Budget Smartphone – Unlimited Data for $ 15.
  • Premium Smartphone – Unlimited Data for $ 30.
  • Other features such as voice and text remain same for both categories.

This will save $ 360 (along with $ 150 ~ 200 user will save when he/she buys low-end smartphones) per two years, not a chump sum. It will definitely drive more people into smartphone area (You only have to pay $ 15 more a month to get Optimus S instead of enV Touch? Sweet!), not to mention extra money carriers will gain when smartphone users buy apps (30% of Android app revenue goes to carriers). This will also drive more people to buy premium smartphones as users are sucked into smartphone ecosystems already (“I already bought $ 200 worth of app for my Kyocera Zio, and I don’t want to go back to featurephones and not be able to use those apps I bought… But my Zio is so slow. Wait, there’s Galaxy S II that’s faster and that can use apps that I bought? Sign me up! It’s only $ 15 more a month than what I pay for Zio anyway”).

What’s good about Android is that the OS have already progressed far enough that it’s very smooth on even a basic, 600-MHz CPU at this point. Along with cheaper and more efficient chipsets developed, manufacturers should be profitable even by producing $ 300 no-contract smartphones. Even $ 200 no-contract phone may work, as LG is trying to do. Although embracing low-budget smartphones with cheap plan may cut carrier’s profit margin at first, carriers should easily see benefits as more and more users will dive into smartphone world and more expensive plan in general. Beside, with lord of money already hauled in by carriers, I got to think that at least one carrier is willing to take a chance.

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Written by Geek Park

May 1, 2011 at 5:10 PM

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