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Recently I bought a new phone from Virgin Mobile (LG Optimus V) for $150 and signed up for a $40/month plan (1200 minutes, all-you-can-eat data). I could have spent $50 more and gotten a Google Nexus S, but I would have been locked in T-Mobile for two more years. I’d also have missed out on a opportunity to really understand US consumers. Let me explain:
During the Econopocalypse, many US consumers discovered the value of a pre-paid cell phone. Without any month-to-month commitment, people could get a reasonably good service at a great price. With the US economy slowly improving, consumers will start upgrading their phones, especially when carriers are getting aggressive with their pre-paid offerings (like Sprint through Virgin).
Parallel to the improving economy is a rise of Android hardware platform. Broadcom last December announced a System-on-a-Chip (SOC) that incorporates a dual-core ARM processor that can work on HSDPA networks (Seth Weintrab of Fortune has more info). Anticipated price (not cost) of an “Angry Birds” capable phone is $100. At those prices, and without a contract, there’s a lot of value in upgrading.
Stephen Sondheim wrote that “wishes come true, not free.” To everyone that created a mobile startup in the last 4 year, your wish (assumptions for business plan, vision, what not) has finally come true. Be careful what you wish for it comes a whole new set of assumptions and opportunities. If you try to bring out all those old ideas, they might miss the make and not take advantage of the new coolness. I’m planning on using a phone that my potential customers will be using, not necessarily the fastest or full-featured.
