“The future is already here — it’s just not evenly distributed.” -William Gibson
The cost of a smartphone has come down considerably over the past few years. However, there are still billions of people for whom the cost remains prohibitive and this is driving more innovation in “entry level” and “low cost” smartphones. Vox Supply Chain set out to build an entry level smartphone for under $30 USD which significantly shrinks the gap between the cost of a regular feature phone and existing low cost smartphones.
There are a lot of factors to consider when setting the specifications of a good quality, entry level smartphone. In almost every case, you find yourself wanting to do more and offer more but having to remember the original goal of building a great quality smartphone that is accessible enough to be many people’s first smartphone and perhaps their first experience on the open internet. We put together a walkthrough of what we considered and our ultimate choices in building the Atlas smartphone:
The essentials
- Actual 3G (21mbps downlink): Most existing $25 or $30 smartphone options are running 2G (EDGE or GPRS) which would shave between $5–10 off the cost but results in a very slow experience. 3G vs. EDGE is theoretically 21mbps vs <400kbps, so there really is no comparison. Giving people a better, faster internet and not limiting speeds so dramatically makes a big difference to the user experience.
- 3.5" touchscreen: Without at least a 3.5" capacitive touchscreen, the experience browsing, watching videos and taking pictures just isn’t the same. For Apple fans, the 3.5" screen was the size used for the iPhone 4S. Many smartphones in the entry level range are moving to 4" screens. However, this can add about $5 to the cost which represents a big percentage of the total cost of the device and a step away from true entry level.
- Real memory (at least 512MB RAM): Android recommends at least 512MB RAM to run KitKat (4.4). From our testing, this seemed to be the appropriate line between usable and choppy.
- Android: We could have dropped the RAM down to 256MB and run Firefox OS comfortably, but the popularity of Android is tremendously compelling. We might look at a lower memory Firefox OS version in the future, but the pricing trade-off was not compelling enough to opt out of Android. Recently, Mozilla announced that they are backing off their focus on low cost smartphones running Firefox OS.
Cameras and storage
- Back camera: 2MP back camera with a flash allows you to take standard photos like the one on the left. The photos have a resolution of 1600 x 1200 pixels. We get a lot of requests for better cameras from buyers just looking at the specs, but we’ve left out a 5MP camera and only use it on our mid-range smartphones. The back camera has an HDR feature which enhances picture quality.
- Front camera: A very simple VGA camera covers the basics here. While there is certainly demand for a stronger front camera for better resolution selfies, there are a few reasons why VGA makes sense for an entry level 3G smartphone. It uses a bit less battery power and produces less data for streaming video calls over the network. As well, the resolution is made for a screen of similar size (like other smartphones that you are connecting to for a video call). The front camera supports a resolution of 640 x 480 pixels that will be good enough to be displayed on the screen for video calls with basic webcam quality. In addition, the lower resolution will help to keep data costs down if used for a video call over the mobile network.
- Enough storage to have fun (4GB): Many entry level devices have 512MB of storage which would just take some of the fun out of having a camera, MP3 player and a world of Android apps in your hand. For first time smartphone users, this pushes storage considerations well down the line.
- microSD card slot: This allows the user to extend the storage by plugging in a microSD card with up to 32GB capacity. Pretty standard stuff.
Chipset (System-on-a-Chip)
We are using the chipset from Spreadtrum (SC7715) with a single core @ 1.0GHz. The chipset is a cost efficient solution that is widely deployed while supporting all the required functions.
The SC7715 supports WCDMA/HSPA(+) and GSM/EDGE communication standards. The chipset integrates a Cortex(TM)-A7 core processor running at speeds up to 1.2GHz, an ARM Mali 400 GPU for high performance graphics, as well as a PMU, audio codec and connectivity functions including WiFi, Bluetooth, GPS and FM to achieve high integration at a low cost.
Although it is not the most powerful SoC on the market, the SC7715 running at 1.2GHz provides Geekbench performance comparable to an iPhone 4S, according to Spreadtrum. This indicates that there is a significant difference in the performance from one generation of technology to the next, in this case Cortex-A5 to Cortex-A7, and the performance is not all about the number of cores.
-Jim McGregor, Principal, Tirias Research
We use MediaTek chipsets for our mid-range smartphones but the SC7715 met all our requirements in this case. We looked at other devices running the same chipset and noted that Samsung’s Galaxy Ace (NXT) also uses it. This smartphone retails in India for 6,900 rupees ($108 USD) on Amazon. Knowing it was being used in production in Samsung’s Galaxy line re-affirmed our choice on chipset. The Atlas has the same memory (512MB) and same chipset at a radically lower price point.
Design and battery
Design was one of the last considerations we had. Most entry level smartphones are simple, plastic boxes. We gravitated towards a form factor resembling the iPhone 4 that can lie flat and feels comfortable in your hand.
It’s relatively easy to snap off the back cover to change SIMs or access the microSD slot when needed. We wanted something simple that would also look a bit aspirational for people making the jump from a feature phone to their first smartphone.
On colour, we went for just Black — or to make it sound slightly more engaging — Noir. This colour choice allows us to maximise economies of scale in production and the aggregation of orders. Colours can be more difficult to do as they require some additional quality controls to make sure there aren’t blots or uneven distributions. We did make some white prototypes which could be a fun option to explore in the future.
We originally tried 1000 mAh batteries but found them to drain too quickly when testing the device. Increasing the battery size to 1200 mAh led to some additional costs but seemed well worth the usability trade-off. One of the entry level challenges is that first time smartphone users aren’t always aware that the battery can be drained really fast if all the functions (e.g. WiFi, Bluetooth, GPS) are always on.
We added in the essential accessories: USB cable, charger and earphones and packaged it all up in a simple white gift box for easy distribution.
Fully loaded costs
- “Seed” stock: Since we sell at wholesale pricing and not directly to consumers (our minimum orders for the Atlas are 1,000 units) we don’t provide any warranty support or repair to users. We do include an extra 2% of devices as additional free units to help our buyers support their users with replacement units or to cover repair costs. So if someone buys 1,000 units for $30 USD, they actually receive 1,020 units at an effective price of $29.41.
- Pricing at volume scale: While the Atlas starts at a unit cost of $30, there are lower prices available for higher volumes. The lowest available is $28.60 for a quantity of 250,000, which is an effective price of $28.04 per unit when you account for the seed stock as above. Another way of thinking about this is that volume can shave $1.40 off of the manufacturing cost of a smartphone.
- Landed costs: The cost of a device coming out of the factory is important, but the story doesn’t end there. One has to consider the total landed cost for the smartphone to get to the end user markets and this is where logistics calculations come in. On our site, we calculate and show air and sea freight options to major ports in 136 countries that adjust based on the quantity being requested, which can be quite a bit of fun to play with. We’ve partnered directly with carriers to bring down the shipping costs. Unfortunately, theft and high insurance costs make shipping smartphones more expensive than other commodities that we work with, so we have to bake that in to our calculations. Shipping costs can vary from as low as a 5 to 7 cents per device to Colombo (Sri Lanka) or Sihanoukville (Cambodia) by sea. On the high end, air freight can cost as much as $2.41 to Bangui (Central African Republic) or $2.62 to Paramaribo (Suriname). We deliver all the smartphones on a CIP Incoterm basis, so you have to factor in duties, customs, taxes, VAT and a retail markup into the fully landed cost of the smartphone. Of course, this is something that can vary widely by country.
Putting it all together
The challenge is not only how to bring a great quality smartphone to as broad a market as possible, but also how to give those customers a great experience on the mobile internet. The world has a lot to gain from more people having access to the internet, and driving down the cost of a smartphone is the best way to accomplish that.
We have all the details on the Vox Atlas available on our website, where we sell and ship it directly in wholesale quantities to telcos, distributors, retailers and businesses around the world.
We welcome suggestions and comments as we continue to improve what we are able to bring to the market.
