There's nothing like the expression of mild surprise to confirm that a radical change in the technological landscape is taking place. While showing people the latest phone I've on review, the ZTE Racer (a £99 pay as you go Android phone from 3 UK) I was struck by how many times I heard things like “Oh, that's actually alright, isn't it?”, maybe a realisation that smart phones are arriving for the masses and not just people who are prepared for spend hefty sums on the latest shiny gadget. This isn't a unique offer either, other networks are offering budget Android smartphones (notably Orange with the San Francisco) so now many people who might not have considered owning a smart phone could now do so leading to some interesting changes and new opportunities.
The idea of cheap, functional technology with a price tag within reach of the average pocket has long interested me and reading Wired's article The Good Enough Revolution: When Cheap and Simple Is Just Fine helped me arrive at the conclusion that mass produced technology should never be ignored as it has the power to drive real change. So, following this, theoretically most people wouldn't be interested in a smart phone, they just want something that can make calls and send text messages? Well no, that may be true for many people but it doesn't account for two important factors that sometimes get missed: aspiration and upsell.
If you walk into your local out of town electrical retailer, the stores where you will find very people referred to by the label “most people” you enter a techno-jargon filled world with a dazzling array of options which can be largely unintelligible. Even I find them unintelligible, recently I thought about buying a blu-ray player only to find this opened up a whole new chapter of jargon that I wasn't familiar with. Innocently I thought it was just a case of getting a player for the discs, some would be shinier than the others but it wouldn't matter, but then I found out about a whole new set of things to worry about. Features I'd never heard of, didn't know what they do, should I worry? Would I regret being dismissive about them? Would get a year down the line and curse my stupid blu-ray player for not having feature x?
If I used as many technological terms in a meeting as an out of town retailer hits you with people would roll their eyes and probably curse me under their breath. So what is going on? I think this is a case of creating an opportunity for upsell. This might be directly from the retailer, but sometimes we do it ourselves. Buying technology is a gamble, developments occur so often now that obsolescence is a real fear. For the sake of a little bit of extra money upfront you can get a device that you almost grow in to. Pay out for extra features now and save having to buy a new device too soon. It's a bit like when you are a child and you get bought a coat that is far too big but you get told you'll grow into it. Can you afford not to have that feature that you've only just heard about?
The other major factor linked to upsell is aspiration. I had to chuckle a bit when I read Ewan MacLeod's post on the Mobile Industry Review website: Vicky Pollard has an iPhone 4; You are not cool any more which in a tongue-in-cheek way commented on the declining exclusivity of Apple's iPhone. It is true that the iPhone has a strange relationship with the idea of being a luxury device, on one hand its price tag (like many smart phones up until now) has kept it out of reach of many people, on the other hand its tendency to find owners in different social groups has earned it the nick name “chavPhone” in some circles.
So has Apple failed in some way? Does this ownership of its devices in lower social classes signal its imminent doom? Not at all, Apple have created a device which some people aspire to own, regardless of background. The difference for them from some other manufacturers is that they don't need to worry about reaching these other mass markets so much, they are doing fine with their current strategy and making a healthy profit. Selling to someone of the background of the lady in MacLeod's article is a bonus for them but they have a dedicated fan base that they can sell to. They don't need to make “good enough” devices with a low price tag. This is a different way of thinking from some of the battlefield like ideas expressed by tech writers, the idea that companies pitch technologies against each other with one inevitable victor. This would be true if the Apple iPhone and Google Android phones were in the same market, but really they are in overlapping markets.
It is important to note that the Apple iPhone and Google Android are not the same thing, the former is a complete mobile phone product, the latter an operating system. Companies such as HTC and Samsung make Android powered phones that compete head on with the iPhone, they have similar features and price points, but the open availability of Android to manufacturers has allowed them to pursue other markets, and this is what is leading to Android becoming a significant mass market player. People in different market segments will have different expectations so it does not necessarily matter if a phone matches up to the standards of the Apple iPhone or HTC Desire.
The ZTE Racer is a really good example of this. For £99 you're not going to get the ultimate smartphone, but it doesn't matter. In that price range it competes head on with mobile phones that might not offer the same opportunity to fulfil aspiration. With phones like this it does not matter if you care about running apps today but find it useful tomorrow, it will grow with you. I found it felt solidly made, responsive to use and could cope with the apps I tested it with (including Spotify and YouTube). It wasn't perfect, the screen felt a bit small and at first it was easy to keep launching apps accidentally and it has a resistive screen rather than the nicer capacitive option, but the trick seemed to be to use your nails!
For your money you get lots of features. On the back of the unit is a 3.2 Megapixel camera (but no flash) which is handy for when you are about. You also get an FM Radio, bluetooth, WiFi and 3G connectivity, access to the Android Marketplace, a document viewer app, a 2.8” resistive touchscreen, Android 2.1, a 2GB MicroSD card and an accelerometer so it can rotate the screen automatically. Last but not least is built in GPS so you can use location enabled services and also make use of the SatNav function built into Android 2.1. The first time you use this you will be prompted to download files for the voice prompts which you will need as the display may be a little small to glance at while driving.
You might not be familiar with ZTE, like Huawei (also from China) they have been mainly known for selling mobile broadband dongles and operator branded handsets in the UK market. ZTE is a company with major ambition aiming to take 10% of the UK mobile handset market by 2012 and handsets such as the Racer and the Orange-branded San Francisco will help them towards achieving this goal. Interestingly both companies are making affordable Android handsets and are planning Android tablets too.
The ready availability of Android to manufacturers and its relative openness has allowed manufacturers to target different markets and allowed the Android world to sustain very different products. This could include products where manufacturers have to sell in bulk thanks to low profit margins on individual devices. Some may wonder why Google allows the Android name to be associated with all sorts of products, some of which may not even be very good. The answer is simple I think, diversity is strength; every product is just a stepping stone to the next product and a path to Android prevailing as the mass market leading mobile operating system. You have to experiment to get ahead, to learn from mistakes and successes and the openness of Android and the number of manufacturers involved allows this experimentation to take place on a massive scale. The lack of centralised control over hardware helps its rapid evolution. It is true that the cheap Android tablet I bought falls the wrong side of the “good enough” line, but the idea of a cheap tablet computer in a world where people now associate this term with Apple's iPad is wonderfully subversive and attention grabbing. Now the idea is out in the open it is encouraging companies to produce and sell cheap tablets of their own.
Until now smartphones have been quite expensive. Typically to get one meant handing over about £400 to buy one outright or signing a long expensive contract. This has perhaps limited the potential of the smartphone market. However the arrival of phones like the ZTE Racer mean deliver the massive opportunity of selling phones to people who prefer pay as you go. According to OfCom, the UK's telecom regulator, pay as you go accounted for a massive 59% of the UK mobile phone market at the end of 2009. People in this segment might have had all sorts of reasons not to buy a smartphone; they might not have been able to afford it, they might have felt that they wouldn't use such a device enough to justify the high price tag, they may simply have thought that owning a smartphone wasn't an option. Low cost pay as you go Android handsets reduce these issues. Of course not everybody will want one still, but it will open up the opportunity and 59% of the UK mobile phone market must equate to quite a lot of people who now could be a target market for these new devices. Here is a product that meets the “good enough” requirement, but also meets an aspiration to own a smartphone. For operators and other companies this could be a successful upsell too, enabling them to sell new services and products to these customers.
So what about “apps”? Here I must declare a selfish interest. As a developer by trade I face the challenge that everybody in our profession has to deal with of constantly retraining to keep up to date with skills required in the market place. Learning a new skill is like making an investment, I want the maximum return for my effort, be that in terms of financial reward, job satisfaction, impact or new opportunities. These are the reasons I decided to start learning how to program for Android, with the added bonus that it makes use of some skills I already have like programming in Java.
I know that if I write code for Android I can make it available on lots of different devices including phones, tablets and soon Google TV. I should be able to write code that will work across these devices and then just customise how they appear to make the most of each device. This is nearly enough in itself but the deal clincher is the idea of Android devices selling across lots of different market segments leading to a mass market. Mobile apps, if they are not free, typically are quite cheap, so the only way I can see this working for developers in the long run, if they want to make a profit, is to be able to sell in large quantities. It will open up new markets too, a good example being 15-24s who, again according to OfCom research, make heavy use of the mobile internet and apps but don't yet tend to own smartphones due to the purchase price.
Trialling the ZTE Racer has been an interesting experience, it confirmed my feeling about the potential of the Android platform and also surprised me as it is a decent phone that I could live with. The only thing I would want to change is the size of the screen, if it was a bit bigger it would be easier to use. Despite this it has a lot to offer pay as you go users, the numbers of features for the price is impressive, but these are features people can discover in their own time, they don't get in the way so this can be an ideal first smartphone for those who would like to own such a device but feel they wouldn't use it enough to justify how much it used to cost.
Smartphone ownership doesn't need to be exclusive anymore, now it is an option open to the masses. That will lead to new opportunities not just for the mobile companies but also for any organisation that sees potential in reaching out to its customers though their mobile phones. In the face of a possible mass adoption of Android how will companies offering competing mobile platforms respond? Could mass ownership of smartphones change people's expectations of services that organisations provide? The arrival of cheap handsets, and the rapidly evolving nature of the Android platform I think means other companies, and possibly a huge number of people who work in IT, will have to work very hard to keep up with Google in the mobile field.