The Problems with Off Brand Sub $50 Phones

There is a whole new movement around “making a fortune at the bottom of the pyramid.” Which essentially is a euphemism of how to make money off people who don’t have much money. California-based Hop-On which is aiming for a whopping 2% of the global cell phone market share, feels that its sub-$50 phones are the way to go. Strategically it all makes a lot of sense. People in India, China and African continent cannot afford expensive phones, but want to use mobile services. Ergo, super affordable phone. Motorola and Nokia, they all want to build that gizmo. Maybe they will – but their cost structures are going to make it tough. What about Hop-On? I just saw two of their new phones including 1813, made specially for the Indian market. Both are butt ugly, and I can promise you will fail to take off.

The fortune hunting at the bottom of the pyramid makes people overlook one simple aspect of our highly connected lives. Satellite TV! Poor folks and poor countries, thanks to TV can now make brand associations. They feel like children of a lesser god if someone tries to sell them an off-brand product. It is something no one seems to take into account. When I was back in India last year, the market was flooded with $35 Ningbo Bird and other cheap Chinese phones. Yet people – who clearly could not afford a $100 phone were buying Nokia and Samsung phones.

A good lesson would be Nokia 1100. It had a B&W screen, good battery life, easy texting and was skimpy on features. But it never felt that way. It felt like any other Nokia phone. It sold in huge numbers in India at about $85 a pop. Other parts of the world loved it as well, and now is one of the most common phones given away as a “pre paid device” in the US. You can pick those up at any 7-11 store. It shows creative thinking in terms of finding gold in them Thar hills!


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