Why You *Can* Build a Smartphone.

In what was by far my most popular post of 2013, Why You Can’t Build A Smartphone, I explained why building a new smartphone platform was futile. Today, like any good author, I’m going completely contradict myself. Yes, it is possible to create a new smartphone platform. You just have to follow a few constraints.

Recent coverage of Google’s Project Ara modular smartphone made me think back to my webOS days.

Oh, we were so young and naive, thinking we could make a dent into the coming mobile platform duopoly (sorry MS). Palm, of course, had Handspring in it’s history. The Visor was the original modular mobile device with a Gameboy like swappable hardware port.

While at Palm (before we were HP) I pushed the idea of bringing back swappable hardware, though as more of a standard dock connector with kung-fu grip. Unfortunately it was infeasible when trying to compete in mass market carrier stores. The last thing the carriers wanted was more SKUs to manage when they were already killing us with the Droid. Customization would have come at the software level. A true hardware modular phone would be DOA.

All of that said, I think creating a new mobile platform, even one with modular hardware, is very doable today. There’s just a few constraints. It’s true you can’t create a new successful mainstream smartphone platform but if you are willing to compromise on a few things, there is plenty of room for new entrants.

What is a Smartphone Platform?

First let’s define our terms. A smartphone platform is:

  • Something that makes phone calls. I’m actually willing to fudge on this one now that Skype is everywhere. Let's just say, something with a SIM card.
  • It has a cellphone contract and is sold in carrier stores. That means dealing with carrier sales guys.
  • Has mass market pricing. No one will buy a $2000 phone. It’s got to be less than $500 (w/o subsidies for a base model).
  • Sells millions of units. High volume is how you can make a phone with mass market pricing.
  • Has a complete app store with all of the apps most people need. This is a struggle even for Microsoft.

    • Nailing all of these is required to be a successful smartphone platform today. As you can imagine, this is practically impossible to do from scratch. Smartphones are now a rich man’s game. You must be prepared to spend upwards of a few billion dollars a year just to have a seat at the table. Only a crazy person with too much cash would try it. Come on Larry!

    Compromise

    However, smartphones ain’t what they used to be. Android, the open source project, (AOSP) is a good core with excellent driver support from chipset vendors. The flood of cheap Chinese phones means there are a bunch of factories who would love to make a device for you. Factories that can handle orders smaller than a million per run.

    All of this means that if you are willing to compromise on one or more of the points above you can make money. It won’t be a ‘smartphone platform’ in the traditional sense and you won’t make billions, but you can still be profitable. Success doesn’t have to mean taking a 10% share of the global market. There are other ways to make money.

    The key is to not build a smartphone, but rather a device built with smartphone components. It may still effectively be a smartphone (just as smartphones are effectively handheld computers); but don’t call it a smartphone. There are lots of markets underserved by current smartphones.

    Here’s a few approaches:

  • Fork Android. Create a custom skin, replace the Google services, and build your own app store. This is the approach Amazon and Xiaomi have taken and it’s worked pretty well for them. (if we ignore the Fire Phone). They each have their own market with satisfied customers. Neither sells in a carrier store or has contracts. Forking Android is still a lot of work, but it’s perfectly viable for some markets and getting cheaper every day.
  • Crazy hardware. Build a phone with a gigantic hi-res screen. Or a tiny projector in the side. Or medical sensors. You won’t sell millions, but there are underserved markets that are prepared to pay a lot more than a typical phone for these features.
  • Cheap hardware. Build a no frills device with hardware from two years ago. Moore’s law gives you an incredibly steep discount on components. You can now build a flagship from a few years ago for under 100$, or even as low as 30$. Performance won’t be great but depending on the audience it will be good enough for many uses.
  • Dedicate yourself to an underserved app market like quality educational software. Many of the educational devices you’d find at a typical Toys 'R Us take this approach. They are essentially large phones (or small tablets) which can’t make phone calls. They are completely skinned and come with their own app stores. The key is they aren’t at all in the same market as regular smartphones. They are replacing existing educational devices that have far fewer features.
  • Modular hot-swappable hardware. This brings us back to Project Ara.

    • The big question is: who would want a modular phone? That is the wrong question to ask. The right question is: who would want a modular device built out of phone parts. I think the answer is: a lot of people.

    Project Ara

    Don’t think of Ara as mass customization. Very few people want an everyday phone with swappable parts. However a lot of people would like a custom non-phone device built on a production run of 1.

    Some things we could build with an Ara device:

  • a medical scanner that can target the particular disease you are fighting this week, and a different disease next week. In the field. In India. Where your only connectivity is a weak cellphone signal. And data tracking with a laptop would take too much power.
  • Inventory scanning. Those guys who stock the shelves at Walmart would love something like this. They can add the latest tracking technology by just mailing a small module to each store.
  • UPS package tracking. When the people in brown drop off your packages they scan it with what is essentially a smartphone with a custom screen and scanner. This device costs a lot more than Ara would. UPS would love it.
  • A phone with a real gamepad attached to it for serious gaming, then taken off when you go out to dinner.
  • A phone integrated into a GoPro for Xtreme Sporting.
  • A smart digital film camera for indie film makers. They want they cool software and connectivity of a smartphone, but with a real camera sensor and large swappable lenses.
  • The portable research lab. Today my phone is a digital microscope. Tomorrow it becomes a projector, then a media server. I would use this every day.
  • An Arduino breakout board. Now the flexibility and ease of programming from Arduino comes to your smart phone.

    • End Game

    Ara isn’t a PC. Don’t think in terms of upgrading RAM or graphics cards. Those are red herrings, like communism.

    The value of Ara is building something completely different out of smartphone parts. This is already happening with smaller runs of custom Android devices (in the 100k range). Ara will let you build a custom device with a unit scale of one. Ara is the democratization of smartphone technology taken to it’s inevitable conclusion.

    So you can take your mega-smartphone platforms to the bank. I’ve got a tricorder to build.

    Talk to me about it on Twitter

    Posted January 21st, 2015

    Tagged: rant smartphone