But the kicker is the price. Tran says that phones made from the BCM2157 chipset will retail for under $100 and may dip as low as $75. Those devices should debut in just 3-6 months (and we might hear about them next month at CES).
By this time next year, Broadcom says it will release a follow-up chip that will allow WVGA displays and as much power as today’s high-end Smartphones at the same $75-$100 prices. That Nexus S that costs $530 now off contract will cost just a fraction of that in just one year.
Broadcom isn’t the only chipmaker taking aim at this new market. There is another chipmaker out of China building the same type of chipset for 3G EVDO Rev. A, the type of network that Sprint and Verizon use. They also say that they can get retail prices below $100.
To be clear, That sub $100 price is not the cost of materials, it is the suggested retail price after the manufacturers (and carriers) have taken their profits.
Those prices will have many feature phone users saddling up with smartphones. And they may open the emerging Asian markets, like India and China, to smartphone customers on a large scale, for the first time ever. That means many more smartphone users and many more Google and Android users, too.
How cheap smartphones change the American cell phone market
Perhaps more importantly, at $100, many first-world shoppers will forgo the subsidized two year contracts and instead choose month to month plans. That price point takes the power away from the carriers. If T-Mobile is having a special and I can just take my AT&T phone over without being hit with early termination fees, the carriers are much more likely to compete for customers.
That, in turn will likely push data prices down. We are already starting to see this happen. Virgin offers a $25/month unlimited data plan off contract. T-Mobile offers a limited $10 date plan off contract. AT&T has tiers that start very low.
Consumers used to feature phone monthly costs of $30/month may even opt to forgo wireless data altogether, instead choosing to use the smartphone’s built in Wifi radio to surf near-ubiquitous Wifi in homes, at work and about town. To entice low end smartphone users away from just using Wifi, carriers will have to make affordable data plans.
Cheap smartphones could change the way carriers price contracts here in the U.S.
Whatever the case, if you thought Android going from 30,000 activations a day to 300,000 activations/day was impressive, 2011 might be an even bigger growth year for Android.
Growth targets are just starting to trickle out, but HTC, who make high end Android devices and a few Windows Phone 7 devices expect to triple their 2010 output in 2011. Yet if things play out the way Rubin, Google, Broadcom and HTC hope, even that may wind up being a conservative estimate for Android growth. What’s most interesting is that unless Apple (AAPL) has a plan to keep up, their iPhone, once one of the only usable smartphone games in town, may wind up back where most Apple products are slotted– at the top of the market, affordable only to those willing and able to pay a premium for Steve Jobs’ aesthetic sensibilities.