Mass market internet phone requires sub-$200 subsidy
Operators' cost of acquisition for the INQ 1 phone, launched today at a joint event held by 3UK and INQ, will be less than $200, Mobile Europe has learnt.
Frank Meehan, founder and ceo of INQ, the Hutchison subsidiary company set up to bring the Skype phone and now the INQ 1 to market, told Mobile Europe that 3's cost of acquisition is less than $200 for the phone.
INQ has been able to bring the phone in at that price because it has based the phone on the 6260 Qualcomm chipset and BREW OS, with its own software overlaid on top. Amoi is making the handsets at the hardware level.
Although the developer is tied to an exclusive period to begin with with 3, Meehan said he is targeting as many other operators as possible, including all the Tier Ones in the major markets.
"Universally, when we show this phone to other operators, they love it," he said.
"High end smartphones typically cost about $500 for operators to acquire and then subsidise, and that is killing the tariffs they can then offer to consumers, which is killing mobile internet usage" he said. "Our cost of build means we can come in at under 40% of the cost of a typical smartphone, to truly take mobile internet use mass market."
The only problem there is that, on the very brief look Mobile Europe has had at the phone, this is nothing like a smartphone.
Yes, the handset offers an integrated communications experience. Once users have logged on to their existing accounts, whether Skype, Facebook, or IM service, all contacts and messages are drawn down into a centralised contacts book and messaging client. Applications can run concurrently and you can switch from screen to screen easily. There are some clever prompts designed to make use of search, and sending items, easier. EBay is integrated with Skype chat, so Ebay alerts arrive within Skype, for instance. There's also an automated highlight and search option, avoiding a cumbersome Cut and Paste process.
But otherwise? The phone looks and feels light in every way. And the 2.2 inch screen seems small, although it can flip from horizontal to portrait mode. A navigational scroll wheel seems fiddly, and needs to be pressed in to operate, but cannot activate the service it highlights itself – the user needs to press a separate OK button. Spec-wise, the phone has an internal memory of 50Mb, a 3.2 Megapixel camera, a basic MP3 player that is integrated with LastFM.
Meehan's point is that what INQ has done is provide integration of key services into the applications, such as the media player, to provide an out of the box mobile internet experience.
He also said that he expected to be able to make more high end phones in future, on chips that can handle higher level multimedia functionalities.
Kevin Russell, ceo of 3 UK, said that the operator had seen the number of active data users treble since the introduction of the Skype 2 phone in November last year. The operator says the INQ 1 is about taking web based applications mobile in a very easy way – getting over the hurdles of useability and pricing. The idea is to provide IM, email, mainline Social Networking accounts, SMS, voice and VoIP on a single device, at a price point that most can afford.
"We think we've developed the first mass-market social networking phone, to continue our internet leadership," he said. He added that although 3 would have exclusivity at first on the phone, it is keen to see other operators sign up for the device, to grow overall usage. Of course, with the companies sharing a parent, then there's no real reason for 3 to insist on prolonged exclusivity.
3 will retail the phone for free if users sign up to a £15 per month contract. If Meehan is accurate about 3's required subsidy, and assuming the user doesn't incur extra charges, 3 will then start to earn back on the phone after nine months, or so.
