iPhone 6 has not been released yet and the crowd that likes to call itself THE INNOVATORS is waiting with bated breaths to again stand in queues for whole nights for the next re-incarnation of the great innovation.
Here is the challenge for this crowd – and a thought experiment for the rest of us.
Why not design and build your own iPhone 7, or at least a phone that rivals the features and functionality of one?
You might imagine that is impossible – but the facts speak otherwise. In fact, we will talk later in this post about a man who has actually done something of that nature.
Afterall, the chipset, the screen, the key componentry – even the assembly service can all be sourced from third parties. A rival operating system can do pretty much what the iOS does. And, the best news of all is that the sum total of all the parts and services add up to far less than what it costs to buy one. Of course, it is not as easy as I make it sound – there is a question of minimum volumes, inventory management, marketing, selling and supply chain management.
But, as I explain in my forthcoming book 5-STAR BUSINESS NETWORKS, even these services can be modularized and outsourced.
Who is already doing this?
Sammy Ohev-Zion, the Chief Executive Officer of Bluproducts is in news this week. In the article titled Meet the tiny, Florida-based phone maker that thinks it can beat Samsung, by David Pierce, his story is covered in quite a lot of detail. The article quotes Sammy as follows:
Ohev-Zion told me, “for a startup company to be able to manufacture — if you weren’t one of these billion-dollar companies you didn’t have the access or the technologies to make your own mobile devices.” But that’s all changed, and Ohev-Zion found that he could build a good phone for the same price as the other guys, and sell it for a lot less. He used his connections to get Blu phones in stock at Amazon, Newegg, Best Buy, and others, and began rolling out newer, better phones at a blistering pace. He believes, and says without a moment of hesitation, that Blu is going to be a real player in the smartphone industry sooner rather than later.
If it costs no more than $299 to make a phone of equivalent quality and features, where does it leave the big mobile phone manufacturers when smaller, nimble players such as Bluproducts start creating and using their 5-STAR Business Networks to bring better products to the markets faster and cheaper. The article goes on to quote the features vs. price comparison as below:
Ohev-Zion, CEO of Blu Products, a relatively unknown manufacturer based in Miami, Florida, says it would cost $299. That’s how much the company’s latest flagship phone, the Blu Life One, will cost unlocked from Amazon or a handful of other retailers when it’s available at the end of April. It’s a 5-inch HD phone with a 13-megapixel camera and stock Android 4.2 (save for a Blu wallpaper), in a thin and light body that appears to hold its own next to the Galaxy and Droid devices of the world.
And the reasons for the price differences you ask? Well as per the article it is all in the marketing budgets and corporate headquarters costs of the big guys (which sound at least partly true). I am sure as a reader you will have your own opinion on that – which you can share below.
But a bigger question to reflect on is this – are we likely to see someone come along and do to mobile phone equipment market what we saw Michael Dell do to the PC market?
When will be able to buy customized hand-sets – with just the right combination of hardware components and features to suit our particular needs? Seems like that day is not far off!