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Smartphones: Why low cost is high priority: Next Big Thing

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Next Big Thing: Smartphones: Why low cost is high priority

5:09 /

CNET's Brian Cooley explains why the next big thing in smartphones may just be a small price.

[MUSIC] Hello. And welcome. I'm Brian Cooley, in search of the next big thing. By the end of this year, 2014, it's estimated that some 1.7 billion people will be using a smartphone. Pretty impressive number. Except in a world of 7 billion people and rapidly counting, it's still a smallish minority. The estimation now is the next billion users will come on board and start using a smartphone because of one device feature in particular. Cheap. [MUSIC] This compact phone. Larger 4.5 inch screen. Firefox OS phone It's two megapixel camera. It's curved white body doesn't look too bad. [INAUDIBLE] search the web. Coming very soon. This could be the perfect introduction. [MUSIC] Today's typical $500-$800 premium smartphone, no matter where you hide the cost of it, is the non-starter for hundred of millions of people who are either in secondary economies or who are personally, right now, in a secondary economy. They are sort of off the grid. In a world that has moved en masse from personal computers to mobile devices for so much of their computing, connectivity and social behavior. CNET's editors came away from the 2014 Mobile World Congress in Barcelona convinced that just about every player in the mobile game has made low cost. A high priority. Despite it's low price, the Moto Go feels well built. And unlike the Moto X, features a curved back that's comfortable to hold. now if you're used to high-flying cutting-edge smart phones, then this thing could be a bit of a shock to the system. Because it's absolutely tiny, and it's very basic. But the upside there is that it's extremely cheap. Nokia says it's going on sale immediately around the world. It's gonna be a low budget phone aimed at emerging markets. Now Huawei has said before that Y stands for you. And that mixed with Firefox OS means that you're looking at an entry level device here. Ultimately, the question is, does this version of Android really have enough apps to be tempting? You can pick this phone up as a Vodaphone, but a mere 50 pounds to pay as you go. The device is currently available at 9.99 without a carrier agreement. Okay, several trends I hope you spotted there. First of all, lower spec hand sets. And I mean lower specs, not lame. One camera instead of two perhaps, fewer mega pixels, two core process instead of four or eight. Maybe a little less storage, a screen you were fine with a year ago and lots of plastic everywhere. But none of that breaks the key function and premise of a smart phone which is your digital life everywhere. Next is the lower cost platform focus. Now Android is already. Basically free to handset makers, though they will pay a fee if they wanna build in pre-installed certain Google services. Microsoft just made Windows Phone free to makers of devices below the nine-inch screen size, that covers all phones and tablets. The Mozilla foundation is showing a reference design for a $25 Firefox based smartphone. Now yes, the screen is fairly small. Kinda crummy resolution, just two gigabytes of storage and low power processor. But if you're coming off a dumb phone with T9 right now those are details. Finally Samsung keeps dancing around this Tizen OS which is based on Linux mobile. The idea here is to go straight to the carriers and say look, we can get together and make a phone that is pretty well functioned. But keeping Apple and Google out of the mix, giving you carrier more flexibility. And I can assure you those carriers will use that flexibility to go down market to capture new users. Then there's lower cost service. This is big because that is the biggest expense you have as a smartphone owner, over time of course. That Firefox OS phone only runs at two and a half G network speed, which is very slow by develop stan. Standards, but honestly, they've had all the costs driven out of that kind of network and communications technology, which helps to make the phone very cheap. And let's be honest, out there in the real world on your fancy 3G or 4G phone, how often is it really running above two and a half G speeds? There's a big trend toward bundling, these family plans, framily plans, multi device data bucket plans. All of them tend to make more efficient the purchase of data where most of your smart phone activity takes place. And then theres the monthly no contract revolution even in a rich market like the US where at nearly a third of all phone users are on a no contract month to month plan that's remarkable and a lot of it is about cost savings as well as choice and flexibility. [INAUDIBLE] Finally there is a big push by carriers in many markets to use spectrum differently and this could lower costs as well. Moving a lot of the traffic off expensive, difficult, hard to provision cellular towers onto more wi-fi hotspots that are dedicated to carrying mobile traffic, not just portable traffic. In the US for example, the FCC is taking a controversial option that it's time to redeploy some broadcast spectrum to those kind of purposes. Like so many technology revolutions, the smart phone era began with an emphasize with a flight towards quality performance out of obsession with the gear and what it can do, followed by a very predictable second phase. Another big global users. Who are focused on convenience and cost. [MUSIC]

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