How Great Cheap Phones Never Get to the U.S.

prostoalex writes "Gary Krakow from MSNBC is impressed with Motorola's C116 phone only to find out that that the phone is not available in the US. The reason? 'A very, very basic GSM handset that handles incoming and outgoing calls as well as SMS messages, the C116 is sold all over the world -- except for the United States. It's not sold here because it's too cheap!' The phone is targeted for emerging markets, where people don't like to tie themselves into monthly contracts, and with little value proposition presents little interest to US wireless operators."

Mobile phones in India

[rmadhuram]

I moved back to India last year after spending 10 years in the US. I found that the cab drivers here have better mobile phones than most people in the US. I guess it has to do with monopolies and regulations..

Re:US needs to be more like Europe

[Inaffect]

"I would like to see phones unlinked from the service providers, much as personal computers are separate from the DSL and cable broadband providers. Imagine if you had to buy a Verizon PC or a Comcast Macintosh and if you switched from Comcast Cable to Verizon DSL you'd need to buy a new PC!"

Ahh yes, the contract game...

Nothing stops you from using an unlocked phone (a phone that is not restricted to the provider) with your sim card on a GSM network. The problem is many cell phone companies, at least in the US, are locking the phones to their provider. They are willing to give you the unlock code, but it seems to be a matter of getting the right person on the phone and waiting a certain period of time before they are willing to do this. So you could technically travel from one provider to another with the same phone.

After getting some rebates on a "locked" phone in exchange for another long-term contract, I sold the phone at full price on eBay and bought a much better phone. After my contract expires, I can technically bring this phone over to any GSM mobile provider.

Another industry "secret" seems to be that you can walk in with an unlocked phone and demand to go without contract - they claim they will not turn down a customer, but this is only if you have an unlocked phone, apparently...

Great sample size Gary.

[Art Popp]

There are a large number of factors that go into the selection of handset models for both the U.S. post-paid and pre-paid markets: features, cost, size, manufacturer support, durability, radio quality, and audio quality among them.

Major carriers have an allotted sum that they can contribute to a person's first handset based on their one-year contract commitment. People in the handset selection teams for these companies choose the phones with the best feature set for that amount of money. There is no bonus for selecting a phone that is cheaper than this amount.

Less expensive phones sometimes get that way by choosing inferior components, and antenna designs. But not always. The only way to know whether a phone was cheaper due to clever engineering or cheap components is to completely reverse engineer the design with a every competent team of engineers, or deploy thousands of them and carefully watch the complaints.

The drive for Zoolanderesque micro phone sizes is over. There is such a thing as too small and consumers have figured this out.

Though there is certainly some deviation from the post-paid phone standards for the pre-paid phones each new model has a cost in customer care training time and handset replacement programs.

There is a push to make more data services available and some favoritism is shown to those handsets that can offer that content. /. users may already know exactly what data services they need/want because they have fearlessly tried them, explored every menu of their phones, and come to a good conclusion as to what is worth paying for. Many people haven't. They only discover a new feature because they see some geeky person use it in a cool way that they'd never imagined, and say "I wish my phone could do that." To which the TruGeek replies. "That's a Nokia 6682. It can take even better pictures than this and send them right to your Inbox. Let me show you how." It may sound like paternalism to sell people phones with more features than they currently think they need, but it's not. It's just good marketing.

When you combine these factors you have a recipe for "I told you so's" The article's author didn't find the buttons too small on this phone (though many would), and where he was, the radio was adequate (though in tiny phones, penetrating the human hand is a definite problem). This phone will never let him "discover" the joys of sending cool pictures at the zoo to his grandkids e-mail boxes (which he may already do with with Coolpix 8800).

In summary. Geeksight is 20/20. We can mathematically determine that there is a slot for this in the American market, but marketing is stranger than chaos theory. And I would like to suggest that the article's author, go bid on the one for sale on ebay (right now AU $20) put his SIM in it. It doesn't get much cheaper than that, and then he could leave the article writing on handset marketing to people with a statistical sample > 1.

[disclaimer: I am a Treo650 fanboy who still has his T68 on the charger]

Re:Mobile phones in India

[rsidd]

Phone unit providers here are Nokia, Samsung, Sony Ericsson, etc -- same as anywhere else. Service providers are mostly GSM, and with them you can use any GSM phone. You buy phone separately and service separately. Most people go for prepaid. (I used prepaid even when I was in the US -- more expensive per minute, but cheaper with my usage patterns -- with Verizon I paid less than $20 a month, half what postpaid Verizon customers did. I'm amazed it's so hard to find prepaid service in the US). Incoming calls are free if you don't roam outside your "circle". And unlike in Europe, dialling *to* a mobile phone is no more expensive than calling a landline. A lot of less-affluent people have picked up mobile phones just for that reason. If my plumber needs to call me, he gives me a "missed call" (calls and cuts off before I answer) and I call him back.

Re:did any of you READ the article?

[freedom_india]

India's cell market is mostly a Prepaid one.

If you lock the phone, there are phreaks who would break the lock for a puny three dollars.

Of course there are a few companies which offer CDMA and basically lock you down with 5 year contracts, but the TRAI (Telecom Authority) here cracked down so severly on such a company, that they have switched to Freedom of consumer.

TRAI here is very active and if not, the supreme court steps in to "regulate" the market.

I hold a corporate plan from AT&T here. There is NO contract, and the billing is purely month-to-month. If they try to "add pork" to my bill, i would carry my number and switch to any of the 4 other regional providers.

Oh, BTW, i can dial up AT&T customer support ANYTIME and speak to a REAL person on third ring, because if they don;t pick up, i will be switching to another provider AND carry my number with me (yeah portability).

Nothing scares customer support here more than a customer carrying the number and moving to another provider.

They tried lobbying parliment for laws against number portability, etc., but the politicians here refused and instead let the TRAI and supreme court decide it. They know if they support BIG telecoms against the common man, their next election would be a "bit troublesome to win".

And now TRAI had made it mandatory for telecoms to provide a SINGLE rate for all calls made anywhere within India. (No long distance, roaming charges). Telecoms here initially refused to do that "citing" costs... but then the supreme court beat the sh*t out of them and fined them heavily.

Nowadays most are running scared of TRAI and if they disobey it, the court comes down heavily.

The customer never had more better luck !

The phone companies misunderstand their customers

[Dracos]

I put off getting a cell phone until December 2004 because I didn't feel I needed one. I still don't use it that often.

The salesman seemed confused by the fact that I didn't want a camera phone, and having a speakerphone was more important. If I was going to get a new phone today, I'd want a video phone even less. I want a phone, just a phone, and nothing but a phone (so help me $DIETY), and I'm sure I'm not alone, even in the U.S.

Obviously, the phone carriers don't care that people like me exist in the U.S.

"Developing markets"?

[Per Abrahamsen]

Most people I know use Internet based carriers, where all interaction with the carrier is through a web page. You can use any phone with their service. There is no subscription, you have an account where you can add money as you like, and you can phone as long as there is money on the account. They are, by far, the cheapest carriers, and has won "best service" awards multiple times.

Cash cards are also popular, especially among children. You buy a card, enter a number on the card on your phone, and can not talk for the amount of money the card costed. No subscription or Internet connection required, but they are somewhat expensive.

There are also subscription based sevices. They have very complex price structures, mostly to make their price impossible to compare with the alternatives. The subscription based services are usually sold with a phone that is bound to the carrier in question for six months. After the six months, the carrier is legally bound to tell you how to unlock it. You can also unlock it for US$ 15 at small shops that are everywhere. This is quite legal, but you still have to pay 6 month subscription fee. Often the rebate you get is higher than the price of six month subscription.

And this is not a developing market. It is a mature market that has benefitted from regulation.

Eh

[NitsujTPU]

I have a RAZR V3. It can do that, shoot photos (which I use frequently), email (which I use frequently), browse the web (which I don't use frequently anymore, but only because it is slow... faster web access I would use all of the time), play games, play various ringtones and music and shoot video (which eats too much RAM, but I would use if it didn't). I can loop my laptop through to Internet access as well, if I so please (and I would, were it faster).

All of those things that Krakow says he doesn't want, I do, and not only out of some consumerist need to buy the best of everything, because I genuinely use the features. If a phone with more features is thrown into my contract, and I'm stuck getting a contract anyway, I'm not sure that I would want to get the cheaper alternative... but that's just me.

Re:US needs to be more like Europe

[geminidomino]

there is simply no reason for a wireless provider to help you switch to another network.

A sense of ethics, maybe? Letting us use our phones as we want to?

And don't give me the standard cell-phone company BS about "subsidizing the cost of the phone." That's what the contracts are supposed to do. Thats why I have to sign up for 2 years to get the phone, and preventing me from taking it with me afterwards is just double-dipping.

Re:US needs to be more like Europe

[hrm]

Here in the Netherlands (or the EU?) the government watched the providers make a big mess of things, then came up with a law that states 2 things

- one year after the contract sale the provider must give you the keys to unlock your phone if you ask for them

- it must be possible to change to a new provider while keeping your existing phone number

It's all still a PITA, but on the whole the companies are behaving.

Re:US needs to be more like Europe

[Thomas Miconi]

The simple problem is that the US is just too big. Setting up a global cellular service over half a continent is a major challenge, which creates a huge barrier to entry. This means that it's easier for existing operators to corner the market, create an oligopoly and impose restrictions on the services offered to the customer.

This is in addition to the fact that the US did not choose a single 1st generation standard (GSM, CDMA, whatever), which fragmented the market even more.

In Europe, you have several middle-size countries in which local operators can develop, and then make agreements with each other to allow for international communications. It works, though it's more expensive (texting my firned in Hungary from the UK costs more than texting someone in the same country).

In the UK alone, I know of 7 significant nationwide mobile phone operators (0range, Vodaphone, O2, 3, Virgin, T-Mobile, Tesco), and I'm sure there are a few more (OK, at least two of these are "virtual" operators which piggyback on the network of another operator, but still, that's more competition).

Thomas-

Re:Eh

[matthew.coulson]

Mines been thoroughly thrashed - dropped on concrete many times (I've a habit of phone spinning), and other than a few scratches on it, and the dust behind the screen (which I'll fix soon when I find the right Torx bit), it's working flawlessly.

Likewise, first phone I've really liked - wouldn't trade it for anything else, it's been a stella performer, never giving any hassle. I've had it since the launch day too :)

Re:did any of you READ the article?

[coastwalker]

pay as you go is cheaper.

I spend £2 or £3 a month on a Vodaphone pay as you go here in the UK, mostly on text messages.

Any kind of contract would be total overkill for usage at this level.

Re:Monthly contracts? Do they mean...

[Jesus_666]

Prepaid is also great for people who just don't use their phone often but still need to be able to do so on the go. I pay 15 EUR a year - because the prepaid card is limited to twelve months, then you have to purchase a refresh, the cheapest version of which is 15 bucks. If I had a contract I would get a new mobile every one or two years (which I don't need or want, I like my 6210), but I would pay more in two months than I pay in a year now.

Of course I could just tell them to send me the most expensive mobile they offer and sell the thing on eBay. With the ridiculous prices of feature-rich mobiles I might even make more money than I pay for the contract...

nokia 1100 - The Made in India Phone

[romit_icarus]

I'm surprised nobody so far has mentioned the Nokia 1100 (http://www.nokia.co.in/nokia/0,,53439,00.html [nokia.co.in]) phone. It's really marvelously designed. This single phone model is driving telecom penetration in India. It costs about USD40, uses the same battery of other phones, but is dust proof and has a torchlight!

When i wanted a second phone other than my blackberry, I chose this one. Great design!

Linked article doesn't match the /.-quoted text

[StarOwl]

Out of curiosity, did anyone actually take a look at the story?

A couple of the statements quoted in the Slashdot excerpt don't actually appear in the MSNBC article. While the article does point out that the phone is geared towards disadvantaged markets, there is no comment made that it's being kept out of the U.S. to pad the profit margins of American GSM carriers.

Is this Slashdot fearmongering, or was the MSNBC story edited to appease the sensitivities of the corporate master's advertisers?

Report fraud. How to get your rebate:

[Futurepower(R)]

If Amazon is doing a rebate rip-off with you, report it: Rebate Roulette [rebateroulette.com].

If Amazon promised a rebate and is trying not to give it to you, that's fraud and theft. Consider very carefully whether you should do business with them in the future.

What you can do to get your rebate (Warning, some of this exposes ugly behavior.):

Use the "F" word: Fraud. Every time an employee quits, it costs the rebate company a lot to hire and train someone new. Minimum wage people don't like to think they are helping break the law. Ask the employee how she or he can justify working for a dishonest company. Tell the employee he or she has the worst job in the world.

Call the manager of the store where you bought the rebate item. Use the "F" word again. Managers have a special telephone number. The rebate company will listen to them. Store managers don't like the word fraud applied to their store; that could cost them hundreds of thousands, if the word gets around. If you don't get satisfaction from the store manager, get his or her name and call the store's main office. The people who work in main offices don't want fraud calls; and they definitely don't like fraud calls in which the name of a store manager is mentioned.

Never let them steal from you. If you ever accept that once, they will know they can do it again. Remember, there are a limited number of rebate companies, and they keep databases on those who apply for rebates. Don't allow yourself to become a known easy target.

Apparently almost all rebate companies are involved in fraud, either for their own profit, or pre-arranged with manufacturers. They try to concentrate on the customers that will accept excuses. The stores will tell you they know nothing about the fraud, but that is not true; they know very well.

Be sure to tell the rebate company that you will file a complaint with the Better Business Bureau, and with your state's consumer fraud department, and do it. Tell the store that sold the rebate item the same thing, and do it.

Note that it is usually difficult to know the name of the rebate company. I talked with one Parago [parago.com] employee about the my experiences with the company for a long time before the employee verified the name of the company for which he worked. Parago operates Rebates HQ [rebateshq.com]. I'm not the only one to have trouble with Parago; read this amazingly ugly story: Parago Rebate Gripes Keep on Coming [gripe2ed.com].

Stay away from stores that hate their customers. My experience with Best Buy has been very negative.

Stay away from stores that offer big rebates on items that have defects that aren't obvious.

It has been my experience that Netgear is by far the worst in failing to send rebates. We have had bad experiences with Netgear equipment being buggy, too. Maybe there are companies who can only stay in business because they fail to sent rebates.

Always be kind and gentle with rebate company employees, but very firm. Remember, the employee is not getting any of the stolen money.

Always keep copies of everything you sent when you apply for a rebate. The rebate companies will exploit any weakness they find.

Remember, if you let them steal from you once, you will be in the database as someone who accepts abuse.

I got a Sony laptop rebate 1 1/2 years after it was denied. I would never buy anything from Sony again, of course, even though I eventually got the rebate. Generally, companies that are abusive in one way are abusive in others. Generally, abuse is part of the corporate culture [wired.com].

In my opinion, this is part of a general social breakdown. The United States government

Re:Mobile phones in India

[LazyBoy]

I used prepaid even when I was in the US -- more expensive per minute, but cheaper with my usage patterns -- with Verizon I paid less than $20 a month

I don't get it. When I look for prepaid at verizon, I find plans that start with a $.99/day access fee that is charged every day, regardless of access. So basically a $30/month fee before you start paying per minute. So how do you get $20/month?

Re:I'm an American

[Catbeller]

I don't have a monthly plan because I outlasted their two year contract, then refused any new one. Feels great.

Just for the fun: I use US Cellular. I don't want a GPS phone, so I never upgrade the device. However, they sent me a letter about a month back telling me that I *had* to buy a new GPS-enabled phone 'cause the guvmint said so. And I was offered a new, discounted phone (tiny print: new 2-year contract). And here's the kicker: they intended to -perhaps- charge me a "substantial" penalty fee every month if I didn't buy myself a guvmint-sanctioned tracking device.

I called 'em up, and the rep apologized and said policy had changed since the letter went out.

Well, that was interesting. But I really don't want a tracking device on me at all times. I'd hate to give up the cell phone. And all the pay phones seemed to have disappeared.