Cell phones include a gazillions features, and it seems the prices charge have no relation to the actual cost plus a reasonable profit to the maker. I have an LG Verizon phone, which even though it’s the basic phone, has a bunch of features not needed to make phone calls:- color screen, camera, a web browser, and whatnot. It was free with a two year plan, but it’s $200 to replace it.
So how much should a basic phone for making phone calls only acutally cost, if you were to buy it without a contract and at a price that covered the cost and a reasonable profit to a manufacturer and retailer. it would included the GPS chip and stuff that’s required, but just have a monochrome screen or even a row of LEDs to dispay the numbers if that were cheaper.
Here’s one for $12.99. I have a similar Virgin prepaid dumbphone. I can’t remember how much it cost, but it was probably in that range. It has a requirement that I put $20 on it every three months, so the service costs me $80/year. I use the phone only once or twice a month, so I don’t come close to using up the prepayments.
I think though that Tracphone subsidizes the price since they’re locked to their service; there was news a while ago that people were buying jillions of phones from Walmart, unlocking them, and then selling them at a profit.
My question isn’t how cheap I can get a phone, but what phones would actually cost without a lot of features and without either subsidies or outragious markups.
The manufacturing cost difference between a phone with the aforementioned features and a phone that just made calls is much smaller than you think. The main cost driver for new smart phones is that many are on the bleeding edge of what is technologically possible and making that product at the beginning of manufacturing cycle is expensive, especially absorbing the R&D costs. As manufacturing volume increases the cost drops dramatically.
The Samsung Galaxy S III I have that fits in my pocket is arguably as powerful as a notebook PC from 2010. The $600 retail cost (straight purchase without a plan) is not some made up fantasy by Samsung.
The cost between making a basic cell phone and one with “smart” features is best seen in the pay as you go phones where you can get a good suite (not the very latest) of smart phone features for 100-200 dollars or so. The most basic phones are 15.00 or so. Your guess that using simple old tech like LEDs etc. would be cheaper still is way off base. It’s a lot cheaper to use the highly integrated chipsets and modules the latest technology can provide you with.
The Nokia 1100 is the most popular cell phone on earth, selling 250 million units (Nokia has a variety of low end models designed for the developing world). I’ve owned one and it is a very basic phone.
They used to go for $10 at walmart until they were replaced by higher end models. But tracfone subsidizes their phones because they make up the money by people buying phone units.
I have no idea what a bulk produced basic cell phone like the nokia 1100 would cost, but I’m guessing $20 is a realistic number.
The problem with this question is that’s it completely theoretical. There’s no way to know the answer to this because the assumptions you make change the answer.
Any given product costs a certain amount to make for a specific number made. If you make 100 widgets, it costs you less per widget than if you make just 1. If you assume “there are no toher phones period and everyone who wants one must buy one of mine”, then the cost per phone is ludicrously low. If you assume the current market, then there’s certain limits, because most people don’t want one. Software is really cheap, so why get a phone which does nothing but dial when pennies more would get you address books, call features, etc?
The phones people listed here aren’t good examples, because those are basically all discontinued models. They get discounted heavily. On that note, however, I work in a… related industry, let’s say, and I can testify that I’ve seen phones going sold for a buck and quarter.