Are you ready for a really cheap smartphone? (The Next Big Thing, Episode 5)

The Next Big Thing is brought to you by T-Mobile, now covering 96% of Americans. [MUSIC] The next big thing in smartphones is pretty small. Home security rides a wave of DIY. And fitness wearables that go much further. Let's get a look at the next big thing. [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 smart phone. Pretty impressive number. Except in a world of seven billion people, and rapidly counting, it's still a smallish minority. The estimation now is that 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- Large, 4.5 inch. Screens. Firefox OS phone A 2 megapixel camera It's curved wide body doesn't look to bad. Get directions for you, search the web coming very soon This could be the perfect introduction. Today's typical $500-$800 premium smartphone, no matter where you hide the cost of it. Is a nonstarter for hundreds 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 its low price the [UNKNOWN] feels well built. And like the Moto X, features a curved back that's comfortable to hold. Now if you're used to high flying cutting edge smartphones, 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 that before. Y stands for year. And that mixed with Firefox OS means that you're looking at an entry-level device here. Ultimately then the question is does a tweaked version of Android really have enough apps to be tempting? You can pick this phone up from Vodaphone but a mere 50 pounds and pay as you go. The device is currently available for 49. 99 without a carry over agreement. Okay, several trends I hope you spotted there. First of all, lower spec handset. And I mean lower spec, not lame. One camera instead of two perhaps. Fewer megapixels. Two core processors 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 lights 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-dollar Firefox-based smartphone. Now, yes, the screen is fairly small, kinda crummy resolution, just 2-gigabytes of storage, and a low-power processor. But if you're coming off a dumb phone with a T9 right now, those are details. Finally, Samsung is dancing around this Tizen OS, which is based on Linux Mobile. The idea is 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 standards. 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 2 and a half G speed? There's a big trend toward bundling, there's 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 smartphone activity takes place. And then there's the monthly no contract revolution. Even in a rich market, like the US, we're at nearly a third of all phone users are now 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. Finally, there's a big push by carriers in many markets to use Spectrum differently. This could lower costs, as well, moving a lot of the traffic off expensive, difficult, hard to provision cellular towers onto more wi-fi hot spots that are dedicated to carrying mobile traffic, not just portable traffic. in the US, for example, the FCC is taking a controversial opinion that it's time to redeploy some broadcast spectrum to those kinds of purposes. Like so many technology revolutions, the smartphone era began with an emphasis on a flight toward quality, performance, an obsession with the gear and what it could do, followed by a very predictable second wave: another big [UNKNOWN] of users. Who are focused on convenience and cost. [MUSIC] Welcome back to The Next Big Thing, I'm Brian Cooley. For the longest time, a home security system was something you called some company to come install, pay them a monthly fee to monitor,. And hope you never use it. Prudent, but not very satisfying. Maybe that's why just about 17 percent of US homes even have one, and who knows who are actively monitored. But our appliance team at CNET Louisville labs are a wash right now and a new interesting new DIY. Home security systems that are connected and go beyond just intrusion and fire detection. Making them interesting [UNKNOWN] for the first time. You get these three products in the mail, you plug in the base tower here and it'll sync up the rest of the components using the sticky tabs on the back. All the devices communicate wirelessly to one another, so it is a very nice attractive system. You won't have to drill into your walls, you won't have to wire anything special into your house. You can add additional sensors that occurred, if you want to cover additional doors, windows or have an extra motion sensor, and they also have a. Carbon monoxide detector, leak detectors, freeze detectors. It's got a motion detector. It comes with a panic siren. And if you pay $350 instead of $199 you get two of these, these motion detecting cameras that are. Capable of switching into night-vision mode. This is a wireless hub sort of designed to be the central nervous system for your smart home devices. Right now you get [UNKNOWN] support, support for smart lock, [UNKNOWN] devices, [UNKNOWN] systems. The app is available for Android and iOS and it's very easy to use. All in all I think it's a fantastic value, a great entry-level DIY option and it's perfect. [MUSIC] For a smaller home. This whole smart home security trend is marked by three particular traits, low cost, choice, and innovation. Low cost, a recent price sheet from a major alarm company shows they charge several times as much for each home security module as you pay for the new diy gear. Here. If that helps get people over a hurdle, it's keeping them from security tech, all the better. Choice. These new systems are the sort of thing you can buy now, add to easily later when you have the time and inclination, and tailor your system readily as your needs change. You can also choose your own monitoring company, or choose to monitor yourself, or switch back and forth. Innovation. The companies behind this new security tech are startups. Or at least operate with that mentality. They embrace online control. Interoperability between gear and the home. Frequent updates to improve the product. And services that are rich. That probably doesn't sound like your current alarm company. World wide, the home security market will grow from about $20 billion in 2011 to almost 35 billion in 2017, creating a lot of room for these new technologies to tell their story, and capture share. Consumers expect intelligent, personal, connected systems everywhere now, without lots of gatekeepers between them and a better experience. All of this is disrupting the traditional home monitoring services industry. And they're now competing head on with telco and broadband companies that are new to the market. And all of them are competing with services that ride over the top of broadband companies. So you've got at least three layers here. What's really needed here, as well, is a redefinition of this term home security to embrace, really, five areas. Is. Security, climate control, appliance control, lighting, and of course, entertainment. And if you push back and look at all that from a higher level you start to realize we're redefining home security to mean more peace of mind than just crisis intervention and prevention. Finally, fitness wearables. Now, we've talked about this before, but there's something new brewing out there. A trend you can either call more intimate. Or more invasive. First, some perspective on this market. New research from IDC suggests about 19 million wearables are gonna ship in 2014. Those are tiny numbers compared to smart phone shipments, small even compared to tablets. But 3x, what went out the door in 2013. And on track to be doing 120 million units a year by 2018. Now you might think something like the Footlogger is just a fitness device and it can do that as a smart insole. But it goes beyond that. They say it can also be used to coach a runner to run differently, to land differently to ease joint pain. How about detecting a fall in the elderly, as they've excellently aimed at doing that. Or even going so far as detecting early on set of Parkinson's disease, which is also typified by some subtle changes is a persons gait. The Tao Wellshell, it's an oddly shaped looking fitness monitor, because it does more than just that. It's also sort of a pocket gym that you can exercise on doing isometric, muscle tension exercises. So, it can tell you your fitness level, suggest the exercises that'll improve it, and then reflect those back to you as you make progress. Then, there's been Google contact lens which can measure blood glucose levels, but not by blood contact, by eye contact, and that solution around your eye. It would then send that information to your smartphone which could be running a real time meal planner app, so you keep your blood sugar exactly where it should be all day. If you're in a high range, it might immediately notify you and medical providers. If you're in crisis range, it might go straight to your emergency contacts or even notify EMTs. Google promises that whatever data comes off this product, should it come to market, would not be aggregated with all the other stuff they have on you. Let's hope so. I watch this category with great interest because it could move fitness wearables from an area that most of us just give lip service to, which is every day fitness, we always tend to put it off and minimize it. Instead, moving this technology to have a real seat at the health and medicine table and increasing its relevance and importance to our every day lives. Hope you enjoyed this show. Find more episodes like this at CNET.com/NextBigThing and email me your comments and suggestions at TheNextBigThing@CNET.com. I'm Brian Cooley. I'll see you next time we go in search. Of what's next. [MUSIC]