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    Article: Google's Schmidt predicts rise of $70 smart phone

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    This all makes sense. It's like calculators - the very first electronic calculators were very expensive, and now you can get them for a buck or two. The money in the smartphone world is in the two year plans and the data usage. Eventually a company is going to see the light that if they sell phones at equal or even higher quality than current devices at inexpensive prices, they will profit because of volume. Pretty cool. I like Mr. Schmidt anyway because, although a Google kind of guy, he uses a BlackBerry Bold as his main squeeze (We've done a couple of articles on his BB usage here at the Stacks). Smart.
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    I can't support any race to the bottom nor anything that empowers carriers to the rank of King. The business model may have some good points but it carries with it some very bad things.

    Disposable zero value smartphones that are nothing more than a tool to lock people into long term carrier plans and deliver Google data to be sold in the Ad space is not a very good thing.

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    Whats the difference between a dumbphone for 2 years vs a smartphone? Yeah basic plans are more but (wishful thinking?) prices drop with more users? Yeah prob not. In any event lets realize the benefits before knocking it.

    We know the benifits of owning a smartphone. There are folks out there that have no idea because the initial price is out of reach. Free phones are good and a start on conract. $70 though gives pre-paid customers access to the same benifits.

    I realized a few benifits at work. I overheard 2 coworkers talking about how much they would like an android, even marveling at touchscreens as if they came out yesterday. Later one was asked a number and needed to get a phonebook out. I had the number before they got the book in hand. Just thoughts. I think $70 is pretty good.

    Wouldn't be against Apple putting out something similar.

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    I predict these $70 Androids will become the most popular smartphones in Asia, supplanting the BlackBerry.

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    I'm more concerned about the end result not the initial benefit. In the end what does the picture look like. I've always believed the carriers should be a dumb pipe. I think it would be great, the more people who can get free or cheaper smartphone the better.

    I'm just concerned at what cost? Selling last years (or older) hardware along with an older OS is bad, giving it away I guess is ok but not when they have to pay monthly fees to use it.

    I can't help but think the consumer is getting the raw end of the deal even if the device is free or very cheap.
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    Quote Originally Posted by srl7741 View Post
    I'm more concerned about the end result not the initial benefit. In the end what does the picture look like. I've always believed the carriers should be a dumb pipe. I think it would be great, the more people who can get free or cheaper smartphone the better.

    I'm just concerned at what cost? Selling last years (or older) hardware along with an older OS is bad, giving it away I guess is ok but not when they have to pay monthly fees to use it.

    I can't help but think the consumer is getting the raw end of the deal even if the device is free or very cheap.
    Oh, OK. With that I agree.

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    Quote Originally Posted by srl7741 View Post
    I'm more concerned about the end result not the initial benefit. In the end what does the picture look like. I've always believed the carriers should be a dumb pipe. I think it would be great, the more people who can get free or cheaper smartphone the better.

    I'm just concerned at what cost? Selling last years (or older) hardware along with an older OS is bad, giving it away I guess is ok but not when they have to pay monthly fees to use it.

    I can't help but think the consumer is getting the raw end of the deal even if the device is free or very cheap.
    I really do not think high end devices will go away. The cheap smartphones with older hardware and older OSes will probably be sold in developing markets and as first smartphones to people who previously used feature phones. More affluent consumers will still buy high end smartphones.

    It reminds me more of the car market. There are some people who buy Ford, Honda, and Kia. Then there are other people who buy Mercedes, Acura, and Audi. The luxury car market has not disappeared due to the availability of cheaper cars.
    Laura

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    I can't really put my finger on it and articulate it very well but I've always been concerned about the carriers b/c they remind me so much of the oil industry, OPEC of the tech world.

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    I've noticed that the carriers tending to be the most expensive are the same ones that also have legacy POTS: Verizon and AT&T. The impression I get is that they need to increase the costs of their wireless service to support the legacy landlines that are no longer making money. It will be interesting to see if anything changes, once nobody wants landlines. The FCC regulations would need to change, though, to allow POTS to be abandoned.
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    Quote Originally Posted by srl7741 View Post
    I can't really put my finger on it and articulate it very well but I've always been concerned about the carriers b/c they remind me so much of the oil industry, OPEC of the tech world.
    Ouch, why is it always the oil industry that's bad? People are happy to have their goods delivered, their fields plowed, their personal transport available, along with the plastics that go into their personal communication devices, and of course they love going on holiday in the aircraft to foreign places.

    OPEC is not the industry, it is a group of countries that got together to take control of their resources as they felt that they were being exploited by the West (which looking back they probably were) much the same as a lot of people in the US are demanding the government should do today with the oil being produced. Gas prices in Europe are so high because governments take a large share of it in taxes, which pays towards the social services etc. being provided in those countries. In the US the government also makes money by taxing the gas you use, not so much as Europe, but enough, then certain States add another tax, causing the price to fluctuate from State to State. Finding oil is not easy, drilling several miles into the earth doesn't in areas where the majority of people would not want to go, come cheap and not every well drilled hits oil it is not like they go out and say we will drill here and get oil, it doesn't work that way. Yes oil companies make profit; they invest money into finding oil, contractors and oil companies spend money developing equipment, building the capability to drill deep into the subsurface, invest in computers to make them fast, improve their graphics and find good use for the Terabytes of storage.

    Move on to the carriers, they put up cell towers, and then find ways to sting the consumer, but in the end we (the consumer) enjoy the benefits of what they provide, can we do without instant access to the web, Yes, do we want to NO. So the only way to break the control of the carriers is to open up to competition. Have you looked at the number of taxes that you pay on your cell phone bill? Why do they do this, because they can, and they love the enormous profits that go in their pockets.
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    Not negating your reply but I have a question or two.

    Gas is refined and then stored until transported. Lets assume it takes a week.

    Why is it that gas refined from oil that costs $90 a barrel goes up immediately when the price of oil bought that day goes up, yet it takes weeks for gas prices to drop when oil prices drop. Could see if it were the same both ways.

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    Jay in answer to your question this is something that really annoys me as well, the way the traders control the prices based on the futures market. People making money buying and selling something without the product every going anywhere, they do it on coffee, sugar as well, and often never invest any money as they can sell before they actually pay for the item, just enjoying the profit, providing of you course you judge the time correctly. Another point you need to consider is that different refineries refine different grades of oil, for example Brent crude, (a light weight oil) needs less refining than the heavier oil that comes out of the GOM, so Brent crude ends up being more expensive to purchase, end product cost (gasoline) remains the same. The older refineries work more on Brent Crude and make a much smaller margin (those on the Gulf coast) and so are being shut down. Refineries take several years to build and of course no State wants them on their land, so there are less and less of them in the US, producing less gas for us the consumer, so as demand increases price increases, other costs incurred are the transportation of the gas from the refiner y the further it travels the more it costs, and since they transport them in diesel trucks as they use more fuel which is becoming more expensive they increase the cost, vicious circle. This has not answered your question in full, obviously there is the inevitable profit margin which increases with greed just as in any industry which should be looked into. A further point is that 1000’s of byproducts also come from that barrel of oil which are used in everyday products which are never considered. Add on to this that a Barrel of oil (about 42 US gallons or 35 imperial gallons) produces about 21-35% of Gas for you to use in your car, just based on current prices $100/barrel, produces 12.6 gallons of gas, @ $3.5/gallon comes out to $44. The question is how much profit is being made per gallon, it is not a simple equation

    Check: http://wiki.answers.com/Q/How_much_g...l_of_crude_oil

    Here is a link from ExxonMobil which may be bias but gives some interesting information, there is probably no more bias in this than in something from the government. That’s the trouble with statistics they can be so easily manipulated.
    http://www.exxonmobilperspectives.co...o-think-about/

    My point is everyone always blames the oil industry, has anyone looked at the profits that the drug industry (legal prescription drugs) makes. Look at all the charity collections for cures to cancer and all the other diseases, yet as soon as a drug comes out the company patents it and charges an exorbitant amount to the insurance groups (which put our premiums up) saying it was all the research they did forgetting about the money injected from us. Then look at the profit Apple or Google are making, people praise them for making enormous profit (the American Dream). Oil had become something to look down upon to blame for all the worlds troubles global warming, whole in the Ozone layer, people not being able to travel etc. yet without it the world would not be eating, the global travel industry would not exist as we know it, we would not be using IPods/IPads/IPhones/Androids/BB or any of the other electronics we use, the farming industry would be nowhere near as efficient and so on. But on the downside war is often fought over oil (or religion) more people die thanks to the delivery systems provided by machines powered by oil.
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    ^^^^Thanks for the very useful explanation. I actually wished I understood the commodities market more. I have a good understanding of the stock market, but commodities confuse me. I would definitely not be a good commodities investor, since I am pretty clueless about that market.
    Laura

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    I remember a friend of mine investing in coffee futures, she never put any money in but just bought and sold using a broker and saw profits coming in, sort of gambling without zero investment, until the price of coffee fell and she lost. This is a place where I believe the government should have some control, I hate to see people making money causing prices to go up and hurting people for their own gain, it's a dirty business. People like Bernard Madoff come to mind, he can justify the money he made by saying it was peoples greed, but people died because of it. I work for a living, I don't believe in making money from money (probably because I don't know how ), but when I spend money I like to have something in my hands that is solid.
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