Smart phone market is brutal, few winners

Submitted by acohill on Wed, 11/14/2012 - 09:10

Business Insider reports that only Apple, Samsung, and HTC are making any money manufacturing and selling smartphones. All the other makers, including RIM, Nokia, and Motorola are losing money. This means that the cellular companies are able to buy most smartphones for less than the cost of making them; this is called a death spiral. This may explain why Google is trying to prop up Motorola; if they don't, the only Android company left standing is Samsung, which then effectively has Google by the short hairs.

The whole cellular marketplace is a tightly knit mess. As more and more people switch to smartphones, more traffic, often by several orders of magnitude, is dumped onto the cellular networks. With traffic doubling every two years, it means that the cellular companies have to keep dumping more money into upgrading and replacing radios. And pushing smartphones onto their customers accelerates the process.

The vision of a world with "big" broadband provided by the cellular companies is just that: a vision...induced by smoking giant bongs stuffed with baloney. Cellular networks are essential infrastructure....for mobility access. And in a few areas, they serve as a barely adequate stop gap for the lack of fiber connectivity.

But communities need to be playing the long game. If you want to believe you can hitch your community's economic future to wireless, go ahead. But with hundreds of communities now making investments in fiber, trying to attract businesses and trying to retain your existing businesses with the notion that wireless is secure enough and affordable enough for serious business use is weak tea....don't smoke the baloney.

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