Here Come The Cheap Smartphones

Nokia 5230 Nuron

Smartphone market share has been steadily rising for the last few years and I think that the growth rates are about to turn exponential. I'm not alone in this belief,  Nielsen predicts that smartphones will outsell feature phones in the US by the end of next year.  The main impediment to smartphone growth is cost.  Even in developed countries many purchasers balk at the average $400 that a typical smartphone commands.  But that's changing thanks to open source smartphone OSs that reduce development costs, the effects of  Moore's law which ensures that the hardware to run smartphone OSs gets ever cheaper and increased competition for market share by smartphone vendors.

Case in point, T-Mobile USA's release last week of the Nokia 5230 Nuron.  It's a full fledged Symbian 5th edition touch screen smartphone with a full retail price of  only$179.99.  That's the price for non contract and prepaid customers and it's actually cheaper than both of the Samsung (Behold $314.99 and Highlight 214.99) touchscreen feature phones in T-Mobile's lineup.  The only T-Mobile touch device that's less expensive than the Nuron is the $149.99 Huawei Tap.

The Nuron is 69.99 if you are willing to sign up for a two year $39.99/month( plus taxes and fees) contract, which doesn't sound like a very good deal.  I expect  the contract price will eventually drop to $0 as it typically does for phones with full retail prices under $180.

I played with a Neuron at my local T-Mobile shop and generally liked what I saw. The phone is small and light with good sized (3.2 in), high resolution (640x36o px) screen, 3G, GPS, memory card slot with included 4GB microSD and a media player with stereo Bluetooth headset support. The browser is the latest  speedier version of  Nokia Webkit with  bookmarklet support. T-Mobile doesn't seem to have crippled the phone to any noticeable degree.  A signed copy of Opera Mini installed without trauma and I was able to grant it  "always allowed" access to the network and file system.

The Nuron has two killer features that make it an absolutely unbeatable deal for anyone looking for a new T-Mobile phone;

  • It  includes the latest Ovi Maps with free lifetime voice guided navigation.
  • T-mobile only charges Nuron postpaid customers $10/month for the unlimited data add on instead of the $25/month that other smartphones require.

Of course the Neuron is an entry level smartphone so there are some compromises in the spec sheet. The biggest one is that there is no WiFi. Other downsides are only a 2 MB camera without flash, a phone pad rather than QWERTY touch keyboard in portrait mode and the somewhat limited amount of  free RAM (about 50MB)  common to all Symbian 5th edition devices. The RAM will mainly be an issue when multitasking more than two or three apps or running resource intensive apps like Opera Mobile or Skype.

With such aggressive pricing Nokia and T-Mobile seem serious about selling loads of Neurons in the US.  This is quite a turn abound for T-Mobile USA which has been boycotting Symbian for many years. The last Symbian phones available directly from the operator were the N-gage QD (2004) and the 6600 (2003).

I expect to see other operators and manufacturers launching smartphones priced under $200 soon. Likely candidates include Android phones from second tier manufacturers and more Symbian phones from Nokia and from others once they get up to speed with implementing open source Symbian.  I wouldn't  be surprised to see Blackberry and Microsoft get into the act too.  Symbian has an advantage moving to lower price points as it's able to run well on slower processors and with less RAM than either Android and Windows Phone, leading to a lower bill of materials.  BlackBerry is hampered somewhat in it ability to compete at the low end by its dependence on a proprietary BIS back end server that someone,  either the user or the operator, has to pay for.

It seems likely that the majority of mobile customers in the US and Europe will be wielding smartphones in the next year or two. But for Smartphone sales to really take off in the US  they need to be adopted by prepaid users. Two thirds of new mobile subscribers in the US are prepaid. To reach that market smartphones and data plans need need to be both available and affordable. The Nuron is a step in that direction but strangely T-Mobile USA still doesn't offer ANY data plans to its prepaid customers beyond a limited walled garden of free sites.  At least prepaid and other users without a data plans should still be able to use the Nuron's free navigation by pre-loading maps and voice files to the SD card using a PC. Prepaid is the big subscriber growth area in the US today.  T-Mobile and other operators would be wise to offer smartphones and a data option to prepaid users.

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