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Phone fatigue takes hold: SIM-onlys now top UK market

Anonymous Coward
Anonymous Coward

Did you think I am going to be the only user? Lets say you sell a million phones which is not an unrealistic number for such a phone then that would be 20 million pound a year j

Only if everybody paid. Which most won't. They'll either use the phone "out of support" and not pay, like most users of older Android devices already do, or they'll buy a new phone either outright or on contract. And any lost or broken devices exit the pool of prospective customers. With very decent devices around the £150 mark, you're suggesting that people would pay 14% of the price of a brand new, warrantied phone, just for the software updates? And then a new battery, say £15 every two years. That takes you up to 20% of the price new every year, for a device that's a minimum of two years behind the curve, has had two years active use, two years wear on the ports etc.

I'd suggest less than one in thirty people would actually pay that. So lets say the phones are £350 devices retail, the manufacturer gets £200, by selling a million they make £200m of sales. After two years, they've got (on my guess) a remaining unlost, unbroken pool of 900,000 phones in circulation, a and around 30,000 customers will pay up the £20. Which gives the maker only £600,000 in year one, and probably declining rapidly after that. Allowing for sales and administration costs on the support package, that's what, £400k for development and testing, on an out of production phone, using many third party components and chipsets that will likewise be out of production and out of support. So there's many elements they still can't rely on to support in newer OS variants. And out of that £400k, what gross margin do you think they'd make? £400k buys you diddly squat in terms of legacy software development and proper testing, so I struggle to see any profit unless you've got far more "support" customers. What promises is the handset maker going to have to make to justify that price? If they're going to say "we can't support Android O because Sony own the IP of the camera driver, and they aren't supporting it now", then people will be demanding their money back, and far from a profit opportunity, the "support" package becomes an expensive customer relations disaster.

Why would a handset maker bother taking on those support risks and problems for a negligible profit when they aren't even any good at software in the first place?

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