Saturday, May 8, 2010

Cell Phone Industry Inflection Point

We'll see a serious change- alright we've already seen a serious change, but everyone should know the old game is totally over- when we see a cheap Android phone on a pay-as-you-go system rather than the contract system. There are two sorts of people who tinker: people who just like to tinker, and people who tinker because they are too poor to apply more expensive solutions. Right now most Android phones are expensive, not to mention the plans, making Android impossible for the latter category. This will change. As much as they protest, there are too many incentives for cell phone companies to open up and lower their prices; if any one doesn't it will be crushed by those who do.

Why Android and not the iPhone? Apple is focused on people who have money and aren't interested in tinkering. They could drop prices significantly in an attempt to improve market share, but their closed nature puts a check on developers and is a target for regulators. Now, applications that actually help the poor tend to do things like help reduce costs on real-world transactions, and since government funds itself by inflicting costs (regulation/taxation) on the populace, one can easily imagine conflict. With Apple, everything is centralized and easily controlled, but with Android regulation is far less possible. It's really hard to kill something that can be downloaded from multiple sites and/or even copied from phone to phone.

Some very tantalizing possibilities.

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