Corante

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Dana Dana Blankenhorn has been a business journalist for over 25 years and has covered the online world professionally since 1985. He founded the "Interactive Age Daily" for CMP Media, and has written for the Chicago Tribune, Advertising Age, and dozens of other publications over the years.
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Moore’s Law defines the history of technology. It held that the number of circuits etched on a given piece of silicon could double every 18 months as far as its author, Intel co-founder Gordon Moore, could see. Moore’s Law has spawned constant revolutions since then, not just in computing but in communications, in science, in a host of areas. Moore’s Law applies to radios, and to optical fiber, but there are some areas where it doesn’t apply. In this blog we’ll take a daily look at new implications of Moore’s Law in real time, as it rolls forward to create our future.
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October 30, 2005

The $50 Cellphone

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Posted by Dana Blankenhorn

free%20cell%20phone.jpgThe $50 phone is coming.

I’m not talking about a phone that costs $50 to make (that retails for $250). I’m talking a phone that costs $50 or less to make at retali. Americans already get free phones, subsidized by one-year or two-year service contracts, they they may not get the implications here.

Readers of this blog know about the big growth in service to Latin America, Asia and Africa. What you may not know is that this is mainly a middle-class phenomenon, even there. Poor people, poor by the standards of those countries, either use middlemen for their limited phone service, or they do without.

  • With a $50 phone, service providers may be able to afford cell towers across the countryside, even in the poorest villages. Families in those villages may be able to afford their own phones. People from those villages may be able to have those phones, and access that service, when they are out in their fields, or in open country. Universal service may really be at hand.

  • Another implication of the sub-$50 phone is that a new mass market of voice-only customers will develop. For now data service relies on more expensive models. Eventually Moore’s Law will allow today’s data services to trickle down onto those $50 handsets, but that will take time. And at that point, the selling point for things like text messaging will be its lower cost. (In contrast, today’s text messaging is seen as an extra-cost add-on to your service.)

  • A third implication of the sub-$50 phone will be its increased use by criminals. A disposable phone means more disposable accounts, more pre-paid services that allow anonymity. It means more phones that can be used as triggers for car bombs by terrorists, or that can’t be traced to kidnappers and bank robbers.

Conclusion?

Universal, pre-paid, anonymous service will come in the voice market before it reaches the data market. The cellphone will become the testbed for what this means, for economies, for world politics, and for society. And that test starts now.

Comments (2) + TrackBacks (0) | Category: Business Models | Consumer Electronics | Digital Divide | Economics | Semiconductors | Telecommunications | cellular


COMMENTS

1. Rick Alber on October 31, 2005 01:12 PM writes...

I think you mean "$50 or less to buy" in your second sentence, Dana. If not, I'm really missing your point.

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2. Edouard Brauer on October 31, 2005 04:31 PM writes...

A phone that cost 50$ or less to make, or even a disposable phone.... are you speaking about the Hop-on never delivered phones ??
I think that Universal Prepaid anonymous service will come to the mass markets with low cost handsets based on VOIP over WIFI networks that are far less expensive to deploy.
I am actually seeking to bridge the digital divide with Voice over Mesh networks... so if anyone wants a 50$ or less wifi handset.... found few interesting options to be developped.. even under the form of a printed electronic prepaid mobile (bio degradable)...

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