Print 29 comment(s) - last by Aloonatic.. on Nov 23 at 5:12 AM

  (Source: Adzookie)
"It's the economy, stupid!"

While it's not exactly rocket science, a new study has confirmed that worldwide smartphone adoption is linked to two major price factors: cost of the phone and cost of services.

The study, by mobile ad firm Adzookie, compares smartphone penetration in 13 countries, the average cost of an iPhone in each country, the average yearly income in each country, and the cost of a smartphone as a percentage of yearly income. 

Countries like Canada, Italy, the U.K., and U.S., whose smartphone penetration is around 30 percent, boast smartphone costs as less than 2 percent of yearly income. Singapore, in particular, has a smartphone penetration rate of 40 percent. Adzookie explains it like this: "A contributing factor to the adoption of smartphones includes affordable subscription plans. Consumers in Singapore pay as little as $40 USD a month for voice, SMS, and 12 GB of mobile data."

Conversely, in a country like India, where the average yearly income is barely above $1000, and an iPhone costs $600 (which accounts for 56% of yearly average income), the smartphone penetration is a paltry 5 percent.

The study itself looks a bit paltry and un-scientific, but Wayne Rash over at eweek claims it compiles data from the UN, Nielsen, and ComScore. Rash also expounds on the data as evidence that the iPhone is over-priced and that low-cost Android devices are the key to further smartphone adoption worldwide. Again -- not exactly rocket science. 

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Tech Leader?
By Raiders12 on 11/22/2010 8:40:01 AM , Rating: 3
I have no idea how we in the US can claim to be so advanced when we are crippled by our own tech industry/monopolies. Our greatest trait is our greatest downfall (free market). My friend from the UK laughed at our phone tech when he came over here. They were sitting on 5 MP camera standard, and our phones we weighing in at 1.3 MP. Now a Droid has 5 MP. The service provided is a rip-off as well. My Verizon plan with my 20% discount, just for talk/text is $60/mo. NO DATA. Absolute ripoff, and there are little options to customize the plan to my needs. Same goes for broadband in our country, a few providers who choke hold the industry and prevent innovation, while keeping prices high.

RE: Tech Leader?
By Reclaimer77 on 11/22/2010 8:54:02 AM , Rating: 3
My friend from the UK laughed at our phone tech when he came over here.

Because the UK has a thriving tech industry?? That's news to me.

RE: Tech Leader?
By Aloonatic on 11/22/2010 9:39:08 AM , Rating: 1
When it came to mobile phones it used to be the case that the UK (well, Europe really) were ahead of the USA.

I went to a friend's wedding in the States a while back and everyone was amazed by my w800i. Bluetooth and colour screens that had more than 16 colours were like something from Star Trek to everyone there, let alone a half decent camera that took photos that weren't a grainy mess and some early "app" type programs too.

Now tho, the tide has turned a little and we are getting smart-phones a little latter, and not necessarily all the best models too.

Anyway, by UK, you can probably take that as meaning Europe, and then you add Nokia and Ericsson into the mix, as well as ARM who are a UK company.

RE: Tech Leader?
By Reclaimer77 on 11/22/10, Rating: -1
RE: Tech Leader?
By Aloonatic on 11/23/2010 5:12:00 AM , Rating: 2
I hope that you have had your medication now and nursey has managed to calm you down.

Sorry that you, and no doubt others here who hate seeing the usa (usa usa *pumps fists into the air* usa usa usa) pointed out as not having always been the greats place on earth with the greatest whatever. Sadly for you guys, it was the case , a few years s back when it came to mobile phones that were affordable and therefore common place, the fine up standing, patriotic citizens of the United States of America were left a little behind people in Europe.

Of course, I am sure that you could but any phone that was available at the time, if you had the money. However you could say the same for someone in Kabul right now, yet you would not say that the mobile phone market is in the same place for the vast majority.

I don't really know why You over reacted and read my comment as "elitist". I go on to point out that things have changed now, so that just doesn't make sense, does it. THINK!

If anyone or group of people on this site are elitist, might I suggest that they are the people from your side of the Atlantic who seem to think that no country outside the usa, with perhaps the grudging exception of Japan, can have any sort of tech industry?


RE: Tech Leader?
By straycat74 on 11/22/2010 8:55:38 AM , Rating: 2
They were sitting on 5 MP camera standard, and our phones we weighing in at 1.3 MP.

Was he from the FUTURE Marty?

RE: Tech Leader?
By Ristogod on 11/22/2010 10:12:09 AM , Rating: 3
Our greatest trait is our greatest downfall (free market).

You couldn't be more wrong. If it was truly a free market, there would be actual competitiveness and consumers would flock to the best deals from the best providers. Right now there are only minor differences between them. And that comes from over regulation in many forms. Not being able to build their infrastructure without intrusion from our government drives up cost. Not being able to pay competitively their employees drives up cost. Our greatest strength is our free market, except that we hardly have that, and that is why there is any weakness at all.

RE: Tech Leader?
By mcnabney on 11/22/2010 11:43:00 AM , Rating: 2
Wireless is far less regulated than wired communication.

And most people are clueless why wireless costs so much.

Those smartphones don't really cost $200, they cost on average around $500. Also, wireless companies pay an ass-ton of money to lease the spectrum to even operate. FCC has made hundreds of billions of dollars renting tiny slices of megaherts out to the wireless industry.

If the spectrum was free and customers were willing to buy their devices for the actual price the service itself would be much cheaper. A bonus to this would be that customers would actually treat their devices better. When you get a feature phone for free, people tend to treat it like junk.

RE: Tech Leader?
By The Raven on 11/22/2010 2:42:41 PM , Rating: 2
I see what you are saying but I think he was talking in a more general fashion as you don't have to be an industry insider to understand some factors that drive up prices.

So I think you both are on the right trail (in my unprofessional estimation ;-)). The fact is that it is not a truely free market. Hell the fact that he mentions monopolies and then free market cancels out his comment. It would be a natural market if we allowed monopolies. But a free market takes gov't/private entity intrusion.

I mean as others have pointed out, consumers go for what is easiest/cheapest and not what affords the most freedom. We naturally prop up these 'monopolies' because we are too worried about what Kanye West is doing instead of watching out for our personal freedom.

I mean take the phone contract. Do those even amount to a discount? Or is it just the fact that you don't have to drop $500 all at once? When you get some bad service and want to switch, too bad. You stuck yourself in a contract.
And now there is a law that says people can switch within the first 30 days I think. Well the law would be uneccessary if the people didn't voluntarily give up their freedom to switch to a different provider. Well at least the lawyers will get some work out of the deal.

I've been contract free for a while now. Its fine except maybe if you are frequntly wiping out your bank acct and need the newest shiniest object out there.

RE: Tech Leader?
By rudy on 11/22/2010 12:55:23 PM , Rating: 2
get rid of verizon then, other companies have much more reasonable rates, but you like most Americans complain but never do anything about your complaints. This is the real problem with Americans we alwasy complain but we still buy from the companies we hate. We also are never willing to purchase things out right so we have a system where we get locked into contracts or bad printers then over pay for plans and ink for the rest of our lives.

RE: Tech Leader?
By rudy on 11/22/2010 12:58:21 PM , Rating: 2
Also unlimited is another thing Americans are always suckers for unlimited there is no such thing as unlimited but we always end up purchasing that and so most people over pay for what they get then subsidize the cost for the couple of guys who over use something. Instead of going out and looking for the cheapest per unit pricing on things like data, texts and voice.

RE: Tech Leader?
By The Raven on 11/22/2010 2:52:47 PM , Rating: 2
there is no such thing as unlimited

Yeah we let the wool get pulled over our eyes a lot like this.

Like portion sizes at restaurants. People go and get some huge thing of food and say,"That was a good deal. A 32oz steak for $30," while giving little thought to the fact that a 16oz steak at a place that gives you normal portion sizes charges you $17. Is it a better deal at the "big" place? Yes. But they also got you to purchase 2 meals without thinking about it. Personally I go for the smaller portions so I can mix it up a bit instead of eating leftovers for dinner the day after. Plus it really isn't a better value if the second time around the food is reheated instead of freshly made IMO.

It's a choice, but it is just something that I guess people just don't think about that much.

Next on the docket: we'll be talking about extended warranties!

Prices and data limits are ridiculous
By FXi on 11/22/2010 7:39:05 AM , Rating: 3
It's still a premium product that most people don't need for the price it's being offered. Throw in 5GB (a paltry amt these days for many heavy users) for $10 per account per month (meaning per "family") and then you have something people might start using more broadly. But at 5x-8x that price, it's a luxury item most can do without in these times.

RE: Prices and data limits are ridiculous
By ZaethDekar on 11/22/2010 7:46:11 AM , Rating: 2
I think also part of the adoption rate is that people are realizing that they don't need a smart phone of that magnitude. Most people I know with them use it for texting and calling. I do the same thing on my phone that I have had for four years. I also use the internet on my phone (albeit slow) and have a few 'applications' that are more practical to have on a phone such as conversion and news.

Would I use a modern smart phone more? Probably not, because I can do the same things. If anything I would use some other features less as it would take less time for web pages to load.

By Da W on 11/22/2010 8:48:23 AM , Rating: 2
5 years ago i had a monochrome cell phone that could only make calls for 60$ a month. Today i have a Wp7 with 1 GB of data for 55$ (canadian price, i know it's highway robery). Imagine what we'll have in 5 years.
For now 1GB is enough for messaging and surfing the web, as long as you download apps and video by Wi-Fi. We're starting to get live TV on those things, since at least here in Canada, most carriers are also cable or stelite TV providers, own a few TV stations themselves and some will even own a hockey club to broadcast exclusive hockey game.

By R3T4rd on 11/22/2010 10:31:36 AM , Rating: 2
I agree as well.

I'd say 80% of people who owns a phone of any sort (Smart or not), uses it for 1) Calls 2) Texting. That is pretty much it. The other 10% of people like us tech nerds will use the full potential daily. The last 10% of people are in between with data usage every now and then.

So basically most people do not need or use alot of Data. Just like most people I know that have smart phones, just text and make calls.

RE: Prices and data limits are ridiculous
By Reclaimer77 on 11/22/10, Rating: 0
By hughlle on 11/22/2010 9:02:27 AM , Rating: 2
I agree. My desire sure was fun when i first got it, but hmmmm, i rarely use a single application, have found 1 game worth playing for 10 minute, have little use for it's video watching abilities, and enjoy the mp3 playback with headphones. Other than that it is a phone, to text and call. I still keep my old sony 850i or whatever it is as it absolutely destroys the htc with regard to phone calls or texts or functionality. Don't get me started on the gimmick of touch screen keyboards.

Mostly for me though, i do not like having to set an entire pocket aside just for a phone and even then bumping into a table etc and that is £500 out of pocket, unless you want to spend a monthly amount insuring the handset as well. If this phone breaks it is not and cannot be replaced.

By tng on 11/22/2010 9:50:56 AM , Rating: 2
I have to agree with you, my laptop can do everything that a smartphone can. The problem is that I can't carry around my laptop in my pocket.

Right now I am paying about $48US each month. While there are several portable apps that I would like to have, up until lately there have only been the high priced plans that go along with them. I don't really want to download allot of data, but some of the apps would come in handy for my job, but not at the price of doubling my monthly bill.

Since when?
By Da W on 11/22/2010 8:21:25 AM , Rating: 2
According to that table in the picture, canadians are the wealtiest people in the world. I wonder when that happened, i surely missed the boat...

RE: Since when?
By Da W on 11/22/2010 8:21:51 AM , Rating: 2
Oh i get it, these are number BEFORE taxes... :-)

RE: Since when?
By tng on 11/22/2010 9:55:32 AM , Rating: 2
Yes, they get taxed up the wahoo, but they have free healthcare...LOL

RE: Since when?
By straycat74 on 11/22/2010 10:41:56 AM , Rating: 2
but they have free healthcare

Not when they come and pay cash to get treatment in the US. And no I am not talking about your typical broken arm.

;o 2 sim card phones?
By plopke on 11/22/2010 8:05:32 AM , Rating: 2
Not sure how it is in the USA but for me personally there are some nice data plans out there like 12 euro for 2GB a month. But then expensive phonecalls. I always wondered are there any smartphones where you can use 2 sim cards? For me personally that would be great. But then again I was always one of those idiots that prefers functionallity and bored looks over styling which seams to be forbidden.

RE: ;o 2 sim card phones?
By Targon on 11/22/2010 9:04:55 AM , Rating: 2
2GB/month is $25/month on AT&T over here. In general, the cost per month for a smartphone is up at around $100/month, give or take. The current trend is to limit the amount of data each month since the cell phone industry has not come up with a way to limit data speeds on a per-user basis, and it is only limitations of the phone plus a general data speed cap set for the cell phone towers that limits the speed.

It would be nice to have the option of paying $30/month for unlimited "slow" bandwidth, and then you have the option of selecting $30/month for a limited amount of data but at faster data speeds. Let the customer select what speed and volume of data he/she wants.

At the same time, customers could pay more for unlimited data but at different speeds, so $30/month for unlimited 200kbps, $60 for unlimited 3mbps, $90 for unlimited 7.2mbps, and go from there. You could see a $5 data plan for a 2MB/month plan at the 200kbps speed, which would suit the people new to smartphones.

is that info accurate?
By poohbear on 11/22/2010 11:18:11 AM , Rating: 2
I find it hard to believe the avg yearly income in canada is $45, 000 USD & South Korea is 19,000 USD. Where on earth are they getting that data from???

RE: is that info accurate?
By nafhan on 11/22/2010 1:56:59 PM , Rating: 2
They're both a little high (possibly numbers from 2007 or so). The value of per capita GDP is open to a lot of interpertation, though. So, the number that's most valuable here (IMO) is the percentage of income.

Want proof data plans are overpriced?
By nafhan on 11/22/2010 9:56:42 AM , Rating: 2
Try to get a phone that doesn't suck without signing up for a data plan. It's not possible. I'm not even bothering to upgrade my phone, because any of the phones I can get without adding a data plan to my account are - from a feature standpoint - the same as the phones I got 2+ years ago.

Hits the nail on the head!
By chunkymonster on 11/22/2010 11:45:34 AM , Rating: 2
The cost of smart phones and their voice/data plans are exactly what is stopping me from adopting a smartphone.

Given that a smart phone and the newer tablets have voice/data capability, the consumer is finally being given a device that can replace multiple dedicated devices. Take the Dell Streak for example, a 5" inch screen which can effectively be used like a tablet has a voice/data plan available. But aside from being a a phone and tablet, the Dell Streak can also replace a dedicated GPS unit, a dedicated MID, a dedicated MP3 player, and replace a dedicated media device.

The Dell Streak with a two year AT&T plan costs $300.00 plus an average of $60.00 in monthly voice/data plan costs. The total cost of ownership for those two years is over $1700.00 for a device that will effectively be obsolete within 9 months of purchase. Where's the incentive?

The Dell Streak may not be the phone/tablet of choice but is a preview of the functionality that is to come and a preview of what consumers will expect from a phone/tablet type device; and the Dell Streak will not become the phone/tablet of choice because of the costs.

"There's no chance that the iPhone is going to get any significant market share. No chance." -- Microsoft CEO Steve Ballmer
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