Google is planning a low-budget smartphone that may retail for as little as $US100, according to rumours coming from Taiwanese supply chain sources.
Nonetheless, the rumour is enticing for several reasons.
First, Google is actually expected to launch the Nexus 6 later this year. That’s the successor to its well-regarded (but modestly sold) Android flagship phone with a big screen.
Second, we saw recently these internal documents from Apple showing that the market is moving away from Apple’s iPhone business, if that business is defined as $US300+ phones with small screens. Apple sells the iPhone at around $US700. Virtually all the growth in smartphone sales recently has been in the sub-$300 price range, and among large-screen phones. Apple knows its own customers actually complain about the price and screen size. So if Google was to bring out big-screen, high performance Android at the $US100 level it could terrify Samsung and Apple.
The emphasis is on “could” here, because profits on such phones are tiny or non-existent. Only Apple and Samsung actually make profits selling phones. So a $US100 Google phone would be a money-loser for Google.
Third, all the buzz at Mobile World Congress back in March was about the $US35 Chinese Android business. It’s not that anyone thinks these things are going to catch fire in the U.S. or Europe. Rather, it’s the principle of the thing: You can make a moderately good Android and sell it for $US35. So why should anyone pay $US700 for an iPhone or a Galaxy S5 (which retails at about $US660)?
Fourth, and this is the most speculative part of the whole thing, a $US100 high-quality Android would look especially enticing in the U.S. market if Apple did actually pursue the rumoured — and suicidal? — plan of raising the price of the iPhone 6 to nearer $US800.
At that point, consumers would be faced with a choice of the “best” phone for ~$800 and what could be the second best phone for $US100.
Here’s the rumour from Taiwan:
According to the source’s “trusted insiders from Taiwan supply chains”, Google has now teamed up with the chip maker “MediaTek” in order to build a very low priced smartphone. The handset would supposedly hit the shelves at prices as low as $US100!
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