Excerpts from Business Insider:
The mobile future has not arrived for everyone.
Sure, your iPhone might FaceTime you to the future, your BlackBerry can BBM “when a New York minute is 59 seconds too slow,” and as the commercials say, your Droid most certainly “Does.”
You probably even know all about retina displays, touchscreens, apps, maps, super-fast 3G networks and synchronized email.
Yet for all the coverage these smartphones garner in TV spots, gadget blogs, and business publications, their respective grandparents were the story from Q1 quarter sales reports.
Yes, the mobile industry is moving toward smartphones, and RIM’s BlackBerry, Apple’s iPhone and Google’s Android are leading the pack. Smartphones accounted for 34% of all phones sold in the U.S. in Q1, twice as much as a year earlier, according to research firm NPD Group.
But while smartphones take off, mobile phone makers are still selling hundreds of millions of “dumb” phones each year — most of the phones sold in the U.S. Many of the most popular here are designed with QWERTY keyboards for high-volume text messaging, especially among text-crazed teens.
For example, according to NPD, the third best-selling phone in the U.S. during the first quarter — after the BlackBerry Curve and Apple’s iPhone 3GS — was the Samsung Intensity, available from Verizon Wireless, the biggest U.S. carrier.
When you consider that the no. 1 BlackBerry Curve is available across multiple carriers — and that the iPhone is, well, the iPhone — the feat is even more impressive. The Samsung Intensity is tied with the iPhone for most first-quarter sales among handsets available on one wireless carrier, according to NPD.
So, what is the Samsung Intensity all about? Despite the power the phone’s moniker conjures, it is decidedly not smart. The Samsung Intensity looks like a basic candy-bar phone and slides to expose a QWERTY keyboard.
It doesn’t do apps and does the web poorly. The display isn’t particularly sharp, it doesn’t come standard with mobile e-mail, and it can’t download music over the air. While the Droid “does,” perhaps the Intensity should be marketed as the phone that “doesn’t.”
But that simplicity has actually helped to drive the phone’s sales.
“While some people are super excited about downloading apps and following people on Twitter from their cell phones, there’s a chunk of the population that absolutely doesn’t want that,” explains Avi Greengart, research director for consumer devices at Current Analysis. “They’d much rather have a device that does less, and theoretically is easier to use because of it.”
That said, analysts, including Greengart, overwhelmingly believe that it’s the most basic of economic principles — cost — that drives consumers away from smartphones. Messaging “dumb” phones, like the Intensity, are the alternative.
Although the price of the entry-level Blackberry has fallen to $50 with a new contract, and carriers consistently roll out compelling smartphone deals with new contracts, it’s specifically the monthly data plan that scares many consumers away.
Verizon, for example, still charges customers an additional $30 a month for the unlimited data plans required to take full advantage of all the modern smartphone offers. That’s $720 over the span of a two-year contract. Many consumers simply can’t endure that extra cost. So for now, they’re still buying dumb phones.
We talked to some of those few remaining feature phone-owners to be found around New York’s Union Square on a recent (hot!) Thursday afternoon, and found that price was, as expected, the major selling point for consumers. (Though two said they got a feature phone because they hated BlackBerries and are biding their time before they get an iPhone, and one didn’t like the considerable bulk of most smartphones).
To be sure, recent moves in mobile data pricing could help sell more smartphones in the coming years, at the expense of feature phones.
Both AT&T and Verizon have introduced limited data plans for less than half the cost of the unlimited plans, and they seem to be working. On AT&T’s earnings call yesterday, the company said that its new entry-level, $15/month data plan is starting to show “nice growth in terms of customers that are now upgrading to integrated devices” (the carrier’s term for smartphones).
So smartphones are no doubt the future of the mobile industry. But in the meantime, we expect phone makers to continue to sell plenty of “dumb” messaging phones.
Courtesy: Business Insider.