The iPhone is for granddads, say savvy teens

4 Oct 2010

In his review of the past week, Siliconrepublic editor John Kennedy highlights an interesting subtrend that could distort the market for expensive smartphones – the kids don’t care, they want entry-level prepay devices, it seems.

We’ll call it the BBM gun, the sub revolution in mobile that could irritate but not wholly injure the smartphone revolution driven by powerbrokers in Silicon Valley. In fact, it all feeds itself.

Basically, to cut to the chase, while devices like iPhones and certain classes of Android and Nokia devices are reassuringly expensive objects of desire that market researchers would all have us aspire to, the reality is that kids, the real fashion setters, can’t afford them unless they were born with a silver spoon in their mouths. And since most of the latter’s mammas and papas are broke or ruined thanks to the recession, this sub revolution could have real legs.

Teens and college kids across America and the UK are accessing devices like the BlackBerry Curve 8520 smartphone on PrePay contracts because they can use BlackBerry Messenger (BBM). Vodafone launched the device last week in Ireland.

The kids are using BBM because of its chat style interface and unlimited characters. And also because it is inexpensive to use and doesn’t come with complicated data plans.

Priced out

“Many of these kids view devices like the iPhone as granddads’ phone because that is their experience,” a mobile industry executive explained. “Basically, some of the hottest devices out there are expensive and it is either their parents or grandparents who can afford them.”

In effect, kids and teens have been priced out of the smartphone revolution and are going for a new class of emerging entry-level smartphones that may not be 3G but enable them to instant message, email and surf at affordable prices.

Of course it is all relative, these kids grow up, gain earning power and start to buy stuff like expensive smartphones.

The mobile industry knows its game very well. Sure, it might irritate Apple CEO Steve Jobs to have his shiny magical iPhone termed “granddads’ iPhone” but he knows he can count on legions of affluent, middle-aged men and women who love the technology and think they’re trendy to queue up and buy the latest toy when it comes out.

On the one hand he knows he can rely on the rest of the mobile industry to school these future smartphone buyers until they have the buying power. But on the other perhaps he’s missing a trick.

Device manufacturers like Samsung speak about creating entry-level smartphones and apps markets that people regardless of economic background can enjoy.

There is less money jingling around the world at present, mobile networks are struggling in the face of falling ARPU and device maker stalwarts like Nokia are struggling to regain credibility.

Apple and Google have done much to put the mobile industry back on the road for growth. But as the ICT industry has learned, the emerging markets in the world are where the real growth opportunities lie for the foreseeable future.

As Intel’s former CEO Craig Barrett said earlier this year, there are 1 billion new capitalists in the world and they all want a good life, with good opportunities, and of course, good technology.

The amount of times I’ve written Research in Motion (creator of the BlackBerry) off in my mind and have had them come back to surprise me is countless. But with clever technologies like BBM, where users gain affordable instant messaging tools, they have ignited the sub-smartphone revolution.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years