4"+ smartphones -- the market has spoken (and it says yes) (1 Viewer)

[Hanson]

Yes, the business models are so different between the US and Europe. Here, you don't really own the phone until your (typically) 2 year contract is up, and there are early termination fees. If you want to upgrade in less than the two years, you end up getting only a small discount from the MSRP, and for the typical smartphone, the MSRP is $400-$600. But the ETF on, say an iPhone is $325. So if I wanted to get out of my AT&T contract and get a phone on Sprint, it would cost $325 just to leave.

In Europe, you buy a phone and then shop around for carrier with month to month contracts. Whatever SIM you put in determines the network you are using. Here, Sprint & Verizon are CDMA and the phones are completely incompatible with the other. You can unlock an AT&T or TMo phone and put in a different SIM, but oftentimes, the one carrier's model doesn't have to antennas in it to get the freq that the other uses for their higher speed networks.

And that's the weird part -- the Evo, for instance, is a Sprint only phone in the US. There are Evo-like phones that HTC makes for other carriers, but months after Sprint had exclusive rights to the Evo. And Samsung released four different versions of the Galaxy S with slightly different specs and different cases for each carrier. The fact that there was the Captivate, Vibrant, Fascinate, and Epic rather than a single Galaxy S probably sounds bizarre to European users.

 

[DaveF]

Once you understand a few key things, it's easy to understand

* Phones on one carrier don't work on another carrier
* You buy a two year service contract with the carrier of choice and they give you a free (or cheap) phone

This creates a few consequences:
* There's a real lock-in to your carrier; You can only really switch but once every two years, when you come off contract.
* There's no "free market" for phones. Their real cost is masked by contract subsidization.
* You can't shop for the best phone independent of carrier (and vice versa, which is why some many people switched to AT&T for the iPhone, and grumbled about it the whole way)
* Until the iPhone, carriers ruled the roost. They dictated all aspects of what features were on your phone, what programs you could or could not download, how you could access music and photos, and so on. If a manufacturer made a phone with some super-awesome feature, a carrier might tell them to remove / disable it for their network.

 

[davesmith]

Originally Posted by Hanson Yoo
In Europe, you buy a phone and then shop around for carrier with month to month contracts. Whatever SIM you put in determines the network you are using. Here, Sprint & Verizon are CDMA and the phones are completely incompatible with the other. You can unlock an AT&T or TMo phone and put in a different SIM, but oftentimes, the one carrier's model doesn't have to antennas in it to get the freq that the other uses for their higher speed networks.

This isn't strictly true. In the UK most people have two year contracts too, but at the end of the two years it is mandatory for the carrier to unlock the handset to any network if asked. So, to save money, you may get a month to month contract (at a very cheap rate) for the handset that you have 'paid off' over the course of a two year contract.

What confused me about the US market is how each carrier has their own version of each handset. So your decision about which handset to buy isn't independent from the decision of which carrier to be with. I think this is the major difference.

Thanks for your replies Hanson and Dave, I think I understand it a bit better now (although terms like CDMA and LTE still mean nothing to me, I guess they are just different network types).

 

[Hanson]

Originally Posted by davesmith
This isn't strictly true. In the UK most people have two year contracts too, but at the end of the two years it is mandatory for the carrier to unlock the handset to any network if asked. So, to save money, you may get a month to month contract (at a very cheap rate) for the handset that you have 'paid off' over the course of a two year contract.

What confused me about the US market is how each carrier has their own version of each handset. So your decision about which handset to buy isn't independent from the decision of which carrier to be with. I think this is the major difference.

Thanks for your replies Hanson and Dave, I think I understand it a bit better now (although terms like CDMA and LTE still mean nothing to me, I guess they are just different network types).

Do the UK carriers offer subsidized phones for extended contracts? I was under the impression that phones were not subsidized, but I suppose getting reduced rates for locking in under contract versus month to month is one of those po-tay-to/po-tah-to situations. In the US, subsidized phones under contract is the standard practice. One of the issues with this practice is that the SRP's for these phones are artificially high, so anyone who wants to but a new smartphone out of contract is in for a case of extreme sticker shock. Then again, most people in the US have no idea how horrifically expensive tech is in other countries compared to the US. These prices after exchange rate conversions are much, much higher than what's asked for in th US, and that's before VAT. If you buy things online in the US, you typically don't have to pay state sales tax, and there is no federal sales tax to begin with.

 

[davesmith]

Say I am considering buying a Samsung Galaxy S in the UK I have two options. I buy it pay as you go for 350 and pay 10 a month for a sim only contract. Total cost for 2 years is 590. Or I get it free on a 2 year contract at about 25 a month. Total cost for 2 years is 600. So swings and roundabouts really. But the contract is better if you dont have the lump sum to put down. And buying outright is better if you want to trade your handset in every 6 months.

 

[ManW_TheUncool]

For us here in the USA, the 2-year total is much higher if we don't go for the 2-year lockdown since the monthly rate doesn't change either way -- even still, a newly available smartphone (or the iPhone) isn't exactly super cheap at say $200-300 (before relatively moderate taxes) w/ the 2-year lockdown. And our monthly rate for a smartphone is something like $35-40/month for the phone service + ~$30/month for the required smartphone data plan (unless you only use it for minimal email type use and go for a cheaper data plan) -- and then, there are various taxes+fees added on top that probably adds another ~$15/month.

Not sure, but maybe cell phones here are always somewhat subsidized (even when not on extended contract) since our monthly service rates seem substantially higher while the subsidized devices are cheaper. Then again, we do have far more territory to cover on our (nationwide) phone plans here in the USA since we're not comparing to some sort of unified Europe-wide service coverage and rates, so I guess that needs to be factored into the service costs.

Current exchange rate is ~$1.65 for 1 GBP.

_Man_

 

[davesmith]

Well for us data, calls and texts are all bundled together into your one off monthly contract fee, you dont have 2 seperate charges. I guess the size of the US does make a difference, but then again there are 5 times more potential customers too. When I visit europe I get charged a little more than in the UK, and a contract doesnt include European usage, but text messages still tend to only be 10p like they are on pay as you go.

 

[Ken Chan]

Originally Posted by Hanson Yoo
The iHummer line was tongue in cheek speculation. But the fact is that the 4"+ Android market is quickly growing while the 3.5" market is contracting. I don't think it's out of line to conclude that consumers are preferring larger sized screens.

iPhone market share was stable. (Or if you're a moron blogger, "dead in the water".) So everyone else in the made up "3.5-in and lower" category must have been doing really horrible. Conflating the two is link bait.

An edge-to-edge screen on iPhone can be slightly larger without making the handset bigger.

 

[davesmith]

I think also you could argue that whether a screen is 3.5inch or 4.3inch, the consumer doesnt really mind. As long as it is bright, sharp and functional. Manufacturers have gone for larger screens recently, but I dont think you could prove that this follows from a consumer demand.

 

[ManW_TheUncool]

Originally Posted by davesmith
I think also you could argue that whether a screen is 3.5inch or 4.3inch, the consumer doesnt really mind. As long as it is bright, sharp and functional. Manufacturers have gone for larger screens recently, but I dont think you could prove that this follows from a consumer demand.

Honestly, it's not rocket science that most people would probably want a larger screen, especially if they actually want to use apps on it, not just make phone calls -- that's of course assuming that screen quality is not noticeably degraded. However, what would work against that desire would be the size/bulkiness (and maybe reduced ergonomics) of the overall phone -- potentially reduced battery life might have an impact as well although not everyone will think/know to link larger screen to reduced battery life.

As usual, there are compromises involved. And everyone will need to figure out what set of compromises work best for him/herself although there may be some particular set of compromises that work very well for a large majority of smartphone users. OR maybe the market really should be split between the two ends of that range (between 3.5" and 4.3")...

_Man_

 

[Sam Posten]

People use Apps on android phones? =p

 

[davesmith]

Another thing I thought about this issue. If you fit a 4.3inch screen it enables you to make the phone itself thinner than a 3.5inch device and still have the same volume inside the device to fit all of the components in.

 

[DaveF]

And yet no one seems to do that; at least from what I've read, no 4.3" phone is noticeably thinner than the iPhone.

 

[Hanson]

The Galaxy 2 is a 4.3" phone and is spec'd at .8mm thinner than the iPhone. But I'm looking at my Evo battery, and between that and the screen, there's not much room left for guts. I don't know where Samsung is going to put it all.

In any case, because of the tapered sides, my relatively thick Evo doesn't feel uncomfortably fat in my hand. I know people who have the extended battery that gives the phone a badonkadonk, and they say it doesn't really feel any different because the back of the phone doesn't touch your hand anyway.

 

[ManW_TheUncool]

Personally, I'd much rather have a thicker phone than a thinner one -- I think that's much better for useability/ergonomics although that may not be best for stowing away the phone in a tight spot. It's not like we're talking about serious bricks here afterall.

The main (ergonomics) problem w/ going to a bigger screen on phones is that the phones will be wider, which might make them harder to hold comfortably -- OTOH, making them longer is not a bad thing IMHO and may well be better for actual phone usage.

And I have no desire to put my phone in a shirt pocket or similar, which is really (more or less) the only reason I can see for wanting anything smaller/slimmer than the iPhone 4 -- and honestly, I think Apple has gone in the wrong direction for actual phone ergonomics w/ how small/slim the iPhone 4 is (although its width seems good)...

_Man_

 

[DaveF]

Originally Posted by Hanson Yoo
The Galaxy 2 is a 4.3" phone and is spec'd at .8mm thinner than the iPhone. But I'm looking at my Evo battery, and between that and the screen, there's not much room left for guts. I don't know where Samsung is going to put it all.

In any case, because of the tapered sides, my relatively thick Evo doesn't feel uncomfortably fat in my hand. I know people who have the extended battery that gives the phone a badonkadonk, and they say it doesn't really feel any different because the back of the phone doesn't touch your hand anyway.

I'm corrected I've not paid close enough attention to esp the newer phones.

But there are days I'm tempted one of these for my iphone
http://www.abcplas.com/pages/RAP_about.html

 

[Hanson]

The Xperia Arc is also a hair thinner than the iPhone 4, but that's sporting a 4.2" screen and, unlike the Galaxy S2, is actually for sale.

 

[ManW_TheUncool]

To be honest, I think they should stop making these phones thinner and start putting bigger batteries in them so they last much longer (like 2-3x as long).

_Man_

 

[DaveF]

It would be interesting to see the thickness and weight increase in a phone with double the battery capacity.

 

[davesmith]

If you see a photo of a dismantled iPad it's really interesting to see how thin the battery is, and how it takes up most of the space inside the device. We're getting to the point now where the size of a device is directly linked to the size of its battery as all of the other components are so small. As for the size of phones these days, I feel that they may be getting a little too big. My iTouch is as big as Id really like to go for a portable device (not the thickness but how tall and wide it is). Would look silly in my jeans pocket otherwise!