AndroidGuys

Our weekly talkback post this week revolves around how much people would be willing to pay for a new handset that “does it all”.  Of course, each person’s idea of ‘all’ varies so it’s interesting to see the different amounts you guys have been saying.  We have to guess that a few months, even weeks ago, the prices might have been even higher.

With the news that Apple is releasing the next version of their iPhone for $199 (2-year contract), many handset makers and carriers have started scrambling to figure out what to do next.  How will they be able to sell their smartphones at prices at $200-$400 any longer?  Even the higher end flip phones will have a hard time selling for $150 now.  There’s just way too much you can do with smart phones to not consider them.

It’s going to take a lot of brainstorming between carriers and hardware companies to figure out a good balance.  How far can they move the needle without customers walking?  The best suggestion we can offer is this - Don’t concentrate on money upfront.  Worry about taking care of the customers on the back end.  Get them signed up to services and have them come to depend on their device.

Apple nailed it with the iTunes business model.  Then they came out with the App Store and MobileMe.  They, with the likes of Nokia, Yahoo, and Google see the value in offering the services.  Forget about making money on hardware.  It’s the same plan that video game consoles have. With the exception of the Nintendo Wii, all of the consoles that come out start out losing money for a while.  It’s in the games and downloads that people end up helping recoup the losses.  Cable companies have been letting you rent your set top boxes for years as long as you’re paying for their services, albeit expensive ones.

So what does the future hold for Android phones?  How much will we be expecting to see them sold for?  It’s not clear, but you can venture to say that they’ll be compared to iPhone’s new price point.  Depending on how much shared ad revenue or services are available out of the box, Android phones should be comparable.  We have to imagine that with having 4 handset makers and multiple carriers in the Open Handset Alliance, scenarios like this had to be covered.

The last few months have seen all touchscreen devices compared to Apple’s UI.  The next year or so will see them compared not just for that, but also for the price.

As consumers, we couldn’t be happier.