At MWC yesterday, several emerging market operators, led by keynoter Sunil Mittal of Bharti Airtel, cited a lack of affordable smartphones as the key obstacle to growing data services and – not coincidentally – ARPU. (GSMA covers the talks here.)
Mittal called for GSMA to mount a program aimed at producing a $50 smartphone in a year.
As goals go, this is less dramatic than President Kennedy’s 1961 challenge to put a man on the moon before the end of the decade. SA’s Wireless Smartphone Strategies service projects that just under 5% of global smartphones will ship this year with a wholesale ASP under $100, so much of the heavy lifting of meeting the $50 price point has already been done. (See “Global Smartphone Sales Forecast by Price-Tier: 2003 to 2016”.)
Still, it’s ambitious. But even more ambitious would be to offer a $50 smartphone that people in developing countries would actually want to buy and use. I hate to keep beating up on the $38 Aakash tablet – actually, that’s not true: I love beating up on it – but the lesson there is that meeting a price point without providing value for money is a bad idea.
Our recent interviews with potential tablet buyers in developing countries and before that with first-time phone users clearly demonstrated that low and middle income customers are willing to accept some compromises to meet their budgets, but not every compromise. A one megapixel cameraphone might be acceptable, but don’t try to foist off some old VGA sensors just to keep the BOM down. (See “Tablet Prospects in Developing Countries: The Voice of the Consumer” and “Voices of the Next Billion: Mobile Adoption at the "Bottom of the Pyramid")
For SA’s blogging from Barcelona, click here.