Cell Phones Are Going To Start Getting Much Cheaper

Since the rise of the smart phone, cell phones have been crazy expensive.  A good smart phone without a contract will cost around $800, more than a decent laptop.  Since these high end phones are actually quite powerful miniaturized computers with cutting edge technology, this has been understandable.  Smart Phones have been at the front of technology's growth and innovation over the past few years

That, however, is going to begin to change this year.  The main reason cell phone makers have been able to get away with such costs is that much of the cost is hidden in your cell phone bill.  Customers have grown accustomed to getting free cell phones if they are willing to go with last year's model or a mid-level smart phone.  Many pay $200-$300 for a top phone, along with a two year contact.  This, of course, means that much of the actual cost of the phone is buried in those monthly payments made under the two year contract.  

Beginning last years, major cell phone providers have begun phasing out discounted phones which are paid through the monthly contracts.  AT&T just announced it is killing off phone contracts entirely.  Instead, users pay one price for their service and another for the phone, which can be paid for in installments over a year or two.  This change is a good thing.  It provides customers with transparency.  They can see what portion of their monthly costs go to the phone and what goes to service.  More importantly, if they choose not to upgrade, they don't keep paying that hidden cost for an upgraded phone that they never got.  Users can save money by holding onto their phones beyond the two year mark.  Once installment payments are done, they just pay for the service.

Of greater benefit to the consumer is that phones will start to become less expensive.  When users received a free deeply discounted phone, they had no incentive to decide if they could make due with something less powerful and cheaper.  Just get the best free phone, or pay a small sum for a top phone, knowing you could probably get that money back as a trade in on your next upgrade. 

When you actually see what you pay for a phone, you may not be willing to pay quite as much. Picking up a new iPhone or Samsung for $800 may dissuade some buyers, even if they know they can pay for it over two years, especially if they find that a $300 phone can do pretty much everything they want.

How cheap can phones get?  Well let's take a look at a very similar technology that has not had the benefit of cell phone subsidies: tablets.  You can pick up the Amazon Fire HD, a reasonably good Android tablet with a 7" touch screen for $50.  There is no reason you could not make a similar device with phone and 4G data for less than $100.  In some parts of the world today, you can buy a cheap smart phone with a camera and Internet for under $30.  Of course, that price comes with some real compromises in speed and quality.

Most of use will want more power and quality than a $30 smart phone can provide.  But I would not be surprised to see some really nice high end smart phones selling in the $300 range in the next year or two.  Even those really highest end $800 phones may fall closer to the $500 mark.  Today, you can pick up the very nice Nexus 5x for under $400.  

There will be some down sides to these price cuts.  The speed at which phones continue to develop will diminish as phone makes focus more on cost savings and less on improving speed and adding features.  But this new phase was inevitable as smart phones move from being "the new thing" to an everyday appliance.

Yet another reason I hate Apple

I've never made a secret of the fact that I hate Apple for a wide variety of reasons.  Most of it comes down to Apple's obsession with obscene levels of profits.  Don't get me wrong, there is nothing wrong with making money.  That is the incentive that drives almost all advancements.  But when a company takes this too far, it interferes with the customer experience and can ultimately drive away many potential customers.

One way Apple attempts to squeeze extra profits out of its customers is by using proprietary technology that either prevents or creates disincentives to use third party products.  One obvious example of this is the charging cable.  When my Android needs a new charging cable, I can pick up a micro USB cable just about anywhere for about $1.  I can also share cables between my phone and a half dozen other devices I regularly use.  When my iPhone needs a new cable, I can expect to pay $10-$20 for a new charger that does pretty much the same thing and won't work with any of my other devices.

Now there are rumors that the next iPhone will do away with the 3.5 mm jack for headsets.  This has been a standard for decades used by all sorts of devices.  It lets me connect my phone to my car stereo, home stereo, any one of a dozen headphone or earplugs, etc.  Apple simply hates such interactivity.  It cuts down on the number of Apple branded accessories that customers must buy.

I saw this change coming the day Apple announced its acquisition of Beats Headphones.  The only good reason for overpaying for that company, which makes a well hyped but technically inferior speakers and headphones, is to guarantee an acceptable headset that can only be used with Apple products (iPhone, iPad, Mac).  This will limit the options that Apple users have in choices of speakers.  It will also mean Beats will start creating "Apple exclusive" speakers and headsets that can only be used with Apple devices.  In short, it cuts down on consumer choice.  You must either go "all in" with Apple, or avoid the Apple ecosystem entirely.  I will definitely choose the latter.  I much prefer Bose to anything made by Beats.

There will likely be adapters or other work around options to bypass this Apple-created road block.  But this just seems so unnecessary to me.  Apple's hostility to standard cross-platform interfaces is just another nuisance for Apple customers to bear.  Sadly, many of them will go along with this and pony up more of their accessory dollars into overpriced mediocre Apple accessories.

An Apple car is rumored in the works.  I wonder whether it can only be driven on Apple roads.

Keep Swinging for the Fences

Perhaps it is appropriate to end the year with a more positive tone.  In looking over many of my past posts, I notice a theme evolving of being highly critical of new technologies that somehow fall flat or seem exorbitantly priced for what they are.  I think that many technology successes are over-hyped and like to point out sometimes better and cheaper options that accomplish the same things.

However, I don't want to give the impression that I oppose the ever improving technology marketplace. Despite some privacy concerns, I think generally, technology can make our lives better in many ways.  Part of my negativity probably stems from the many reviews that hype new features that are not particularly useful or refined while ignoring the considerable cost differentials between the latest model and the one that came out last year.

When new disruptive technologies hit the market, they may at first be priced very high or not be as stable and tested as older technologies.  But as they mature, the prices tend to come down using them becomes more stable over time.  This is normal and expected.  But reviewers who are always chasing the newest thing and looking to the future (which is understandable) tend to ignore the many benefits of waiting.

For example, while the original iPod was overpriced and not as good as other MP3 players on the market at the time, it changed the market to make digital music the primary way people listen to music.  Over time, it evolved into a much better product that ended up crushing most of the competition.  Today, the iPod technology, which has been incorporated into the iPhone, is still a great way to listen to music.  Its evolution over time made it a much better product and less expensive for what you were getting.. Many of the user interface features that made it attractive to consumers eventually showed up in products made by the competition as well.

Similarly, the first Kindle was $400, held only 250 MB of internal storage and turned pages very slowly. Today you can buy a much better device for a fraction of the cost.

Three years ago I posted Don't Buy a Tablet Now because they were overpriced and under-powered. But of course, I have purchased several tablets since then as prices fell while power and performance improved.

I guess my view is that these new technologies are great and I appreciate people who subsidize these advancements by paying top dollar when they are first released.  I then benefit from that technology a few years later when it is cheaper and has all the bugs worked out.

It makes sense to wait for most technology, but I appreciate that someone needs to be first.  Also, technology companies have to keep swinging for the fences, even if that means that much of the time, they strike out while trying.

While the prudent consumer may wait a while, we all benefit from these breakthroughs and changes after a few years.  If I sometimes sound too negative about the latest thing, it's not that I will necessary feel that way forever.  I'm just waiting for better and cheaper.

Wireless Charging: Not Worth The Trouble

Several top end cell phones offer wireless charging now, the Samsung Galaxy S6 probably being the most popular.  Surprisingly , iPhone has not yet jumped on that bandwagon, for which I commend them.  You can buy a case that will allow you to charge your iPhone wirelessly, but I say don't bother with any of it.

The notion of wireless charging is an intriguing one.  I would love it if my phone could charge while in my pocket, while I was using it, or even just sitting on a shelf.  But none of that is a reality with current wireless charging.

As currently available, a wireless phone must be placed, back side down, directly onto the charging pad.  It must be touching the pad at all times in order to charge.  The platform is much larger than a typical charger, making it far less convenient to carry around with you.  Charging also takes longer when done through the wireless interface.  Samsung's wireless charger will also cost you $50.  There some cheaper chargers made by third parties, but all are far more expensive than you would pay for a simply USB charger.

So for wireless charging, there seem to be many negatives:

• I must be very careful how I place my phone on the charging stand.
• The charger is much larger and inconvenient to carry around with me.
• The charger is more expensive than a normal charger
• Charging takes longer
• I cannot pick up and use the phone while it is charging

On the positive side, well I guess it saves me the 5 seconds it takes me to connect my USB charger.

When wireless charging evolves to the point where one can charge efficiently while carrying around a mobile device, I'll be impressed. The current wireless solution is simply a waste of time and money.

Google Gets It Right: Android Moves To Laptops

Google's Android dominates the phone and tablet market worldwide, with over 80% marketshare. But Google seems to have been loathe to encourage use of the Android OS on a laptop or PC.  I've never really understood this.

Instead, Google has been pushing Chromebooks.  These are typically cheap laptops that require very undemanding hardware specs.  Chromebooks runs on Chrome OS, which is essentially the bootable Chrome browser and little else.  You cannot install much of anything on the laptop locally, which has only a tiny hard drive where not much of anything can be stored.  The idea is that everything is in the cloud and there is no need for local storage.

Despite low prices, Chromebooks have met with only limited success. There are times when people need to work offline or do other things that cannot be done on Chrome.  Therefore the laptop can be of extremely limited use.  If low cost is the issue, one is probably better off with a used ten year old Windows XP laptop than a new Chromebook.  Even an ancient Windows computer can install the Chrome Browser and access your online resources.  In addition, it has the ability to run local programs and store files locally.

Google seems to have been hedging its bets.  It has used Chromebook as a way of trying to drive users to the cloud, making the Chrome browser the gateway to all computer use.  At the same time, the Android OS for phones and tablets used the App based approach.  Most of what you wanted to do was not handled through a browser, but rather through dedicated apps designed for a specific purpose.  Many of these apps would work offline, so a user had some functionality even when away from an Internet connection.

The market seems to have spoken clearly on this one.  Chromebook sales are going to be a little over 7 million this year, while Android is on over 1 billion devices.  Android, which contains a Chrome browser by default, can do pretty much everything a Chromebook can do.  But a Chromebook is not capable of letting users run all the apps available on Android.

Rumors are that Google is looking to phase out Chromebook and adapt Android for better functionality on devices with a larger screen and keyboard, i.e. laptops and possibly even desktop PCs.  This makes sense to me.  I guess I don't understand what Chrome OS offers that Android does not.  Sure, Android is not a full service OS like MS Windows, but neither is Chrome OS.  Both of these products are designed for people who are willing to accept less functionality from an OS but who benefit from its lower hardware demands and the ability to operate faster with less computing power behind it.

By doing away with Chrome OS and making an adapted version of Android that looks better on a larger screen and works well with a traditional keyboard, Google should be able to combine these two separate tracks into one good OS that works well on phones, tablets, and computers - something Microsoft has been trying to do unsuccessfully for years.

Microsoft is No Longer Serious About gaining Market Share in the Cloud..

All companies need to make a profit.  Some companies, however, garner a reputation for screwing customers in an attempt to squeeze a little extra money out of them.

A few months ago, I posted a comparison of Microsoft and Google's online file storage and email services entitled Microsoft is Finally Serious About Its Online Services.  Now, Microsoft has taken a huge step backwards in its attempt to attract customers into its ecosystem.  It reinforces my view that Microsoft is not a company to be trusted.

Until this change, the owner of a free OneDrive account could access online version of MS Office and could enjoy 15 GB of online storage.  Users could get another 15 GB of storage by signing up for photo storage.  Now that many people have come to rely on this service, Microsoft is pulling the rug out from under them.  If you were enjoying your 30 GB of online space, you now have to make due with a mere 5 GB.  This does not just apply to new accounts.  Your existing account will be cut back as well.

If you want to avoid this cuts, you need to pony up cash for a paid account.  Microsoft is also raising the price of its paid plans and doing away with its unlimited plan.

I cannot begin to imagine what the Microsoft execs were thinking when they pulled the rug out from under their customers other than getting a few more paying customers short term while turning off a generation of customers who were just beginning to trust the new Microsoft.  The company has a reputation for changing the rules on its customers for its financial gain.  I thought that a new CEO would change things.  But this move kills that notion.  Meet the new boss, same as the old boss.

Bottom line: if Microsoft offers you a good deal on any good or service, don't really on it to continue.  It is no more reliable than a subscription that gives you an initial discount.  Maybe it is worse since an up-front discount at least informs you what the later terms will be.

After this action, users may be concerned about other attempts to squeeze more revenue out of services on which they depend.  There have been rumors that Microsoft may eventually charge a subscription for Windows updates.   Microsoft Office, which has already moved from a pay once to a pay forever subscription model may see price increases as well.  Other free Microsoft services such as Skype may also see cutbacks. Perhaps Microsoft will kill its free Office 365 cloud offerings, or start charging for its Office phone apps. These possibilities make customers wary of growing too dependent on Microsoft and encourage them to look for alternatives.

I had begun to move some of my work from Google Drive to Microsoft in the last few months.   But now I'm running back to Google and staying there.  Even if I like some aspects of Microsoft's online services better, I much prefer the stable terms that Google has maintained for years.

Google's Project Fi

In case you never heard of it, Project Fi is Google's attempt to enter the world of cell phone service. What first caught my eye was its price: $20/month for unlimited talk and text.  Data is not unlimited, but even there the terms are better than most other providers: $10/GB.  The great thing about the data plan its that you only pay for what you use.  If you only use 852 MB for the month, you pay $8.52.  This is done by paying for a 1 GB plan for $10 then getting a $1.48 rebate for unused data.  If you go over your data plan, you till only pay the same.  For example, if you set a plan of 1 GB/mo and use 1.53 GB you pay an extra $5.30 for the 5.3 GB you went over.  If you can keep most of your data usage on WiFi, which is free, Your cell phone costs can plummet.

Even better if you to a lot of international travel. Google allows you to travel to over 120 countries where you still pay the same $10/GB for data use.  International texts are always unlimited and included in your base costs.  Calls while abroad are only 20 cents/minute.

There are a few down sides: first, you have to buy an unsubsidized phone.  Also, that phone has to be one of a very few models: the old Nexus 6 or the new Nexus 5x or 6p.  The cheaper 5x will set you back $379.  The 6p starts at $499 for the base model.  Since we are used to paying subsidized charges of $200 for the very best phones, this may seem like sticker shock.  But if doing so reduces your monthly charges from $60 or $70 per month to $30 or $35 per month,  You will see big savings pretty quickly.  You can also pay off the phone cost over a standard 24 months if you prefer.  Given that the Nexus phones are probably the among best Android Phones on the market, you are not compromising quality.

Coverage may not be the best.  Project Fi allows you to use both the Sprint and T-Mobile networks. So you get better coverage than either one of those carriers alone, but most people demanding of coverage everywhere will find this service a cut below the better coverage of Verizon or even AT&T.

Part of the poor cell coverage is ameliorated by the fact that Google Fi is always on the look out to connect to available secure WiFi, which is used not only for data but also voice and text.  

I could see this plan being very useful for people who mostly use the cell phone for talk and text, and you don't use a great deal of mobile data.  It also makes sense if you to a fair amount of international travel.  Even if you mostly use data when you are connected to Wifi, it is a real convenience to have the mobile when you need it, and not pay a huge base cost every month just to have it in case.

I also like the idea of not being locked into a contract.  For people needing a phone for only a few months, they don't have to worry about a two year contract and can sell their relatively new phone when done with it so as not to take a huge hit on that.  For people who are happy using the same phone for three or four years, you will rack up even more savings than you would under the subsidized phone model.

The plan probably doesn't make sense if you are a heavy data user.  In that case, an unlimited plan from Sprint or T-Mobile is probably better.  Similarly, if you have a family plan with shared data, you may be better off financially going that route.  I'm also not convinced that Project Fi will be viable long term.  If it gets too successful, one of the supporting carriers may bail on it.  You can use your Nexus phones on any network, so you don't have to worry about being left with a brick. Even so, a stable carrier experience is preferred.

It would be nice if there was a completely pay as you go plan that gave a reasonable price for talk minutes and texts as well as data.  I know a great many people who use their cell phone very little and simply want it for rare occasions and emergencies.  There are already pay as you go options out there, but Google could be really competitive in that market.

I would like to see where Google is going with this.  I certainly understand why they want to kill Verizon and AT&T's strangle hold on internet mobility and support those efforts.  I hope the competition may force all carriers to cut prices.  All that remains to be seen.

At present, all I can say is the Google's latest foray into mobility is interesting.  This company has already upended several markets to the benefit of the consumer.  I'll be interested to see how Project Fi grows in the coming years.