What you see above is not a new Samsung model, though it looks suspiciously like something straight out of the Galaxy lineup. As the branding suggests, it’s from a company called Blu Products, and the phone is called the LIFE One. You might not have heard of this yet, and that’s understandable. Blu isn’t the most known name in the smartphone game. You won’t even see them on market share reports; they’re always tucked into that “others” category. But they stand to make an impact.
At this point we’re all familiar with the sales model for smartphones. Manufacturers sell them to carriers, who in turn offer considerable subsidies in exchange for a two-year commitment. The full retail price of the Samsung Galaxy Note II is $700, but you pay just $200. That’s not some gift from a benevolent carrier. You pay back that $500 difference during the course of your two-year commitment, in the form of your monthly bill.
Yet that doesn’t tell the story of why smartphones cost so much in the first place. Are there really $700 worth of components in the Note II? Hardly. For starters there’s the standard retail markup, though carriers claim that the retail price is very close to the wholesale price. (In other words, they make almost all their money on service, not phones.) The manufacturer applies significant markups to each phone, because it has plenty of costs to cover itself: personnel, R&D, processing, and of course marketing. So while it cost Samsung nowhere near $700 to create the Note II, it marks up the device so that it can cover those costs and make a tidy profit.
The sheer size of companies like Apple and Samsung mean that we won’t see changes to this model any time soon. That strikes a blow with carriers like T-Mobile, which want to abolish the carrier subsidy model, and prepaid carriers. They can’t offer the latest phones, because they’re too expensive without the subsidy. And so the major carrier model prevails — and according to the latest numbers it is working.
Blu stands to disrupt this comfortable model. As a startup, it isn’t burdened with massive overhead. It can merely build a phone and sell it at a reasonable markup. They’ve done that to an impressive degree, especially given their lack of familiarity in the market. Last year they sold 4.1 million units worldwide, mostly in Latin American markets. They do have a presence in the States, but without the marketing power of Samsung, or even HTC for that matter, they haven’t made significant inroads. Perhaps their latest offerings will help.
Pictured above is the Life One, a device we can compare perhaps to the Samsung Galaxy S4. It’s not quite as souped up, but it does have a 1.2GHz quad-core processor, so it’s plenty speedy. It features a 5-inch screen with Gorilla Glass 2. Its camera boasts 13 megapixels, and it has a hefty internal storage of 16GB each of ROM and RAM. Best of all, it runs 4.2 Jelly Bean, something you don’t get from every new release these days.
Along with the Life One, Blu announced two other companion phones, the Life View, with a 5.7-inch screen, and the Life Play, with a 4.7-inch screen. They all have that powerful 1.2GHz quad-core processor, though the screens, camera, and memory differ. The Life Play is the low-end model, while the Life View is Blue’s take on the phablet form factor.
How much do you think they charge for these relatively high-end, unlocked devices? The One and View cost $299, while the Play is $229. That’s an incredible value, given what you can get for similar prices. There won’t be people lining up for these phones when Blu ships them in late April, but there should certainly be some level of interest.
The biggest downside: no LTE compatibility. That’s fine for now, because LTE isn’t something that most prepaid carriers offer. Right now the phones have radios that put them on GSM Quad Band and Tri-Band HSPA 850/1900/2100. That limits their usefulness right now. But it’s still early in the game for Blu, and their primacy in Latin America can afford them time to grow in the US. Who knows: maybe they’ll prove to be perfect partners for T-Mobile and its drive to eliminate subsidies.
If you’re looking for a cheap handset to bring to your favorite prepaid carrier, check out Blu’s stock on Amazon. You can probably find something within your price range that will work with a prepaid carrier.
Via The Verge.