Cheap Android devices are expensive to carriers


"Sign up to MetroPCS now and get your very own free Droid Dreamphone!" It turns out that all of those cheap (and sometimes free) Android phones saturating the market may not really be so cheap, after all. In fact, they may be costing telecos billions, according to a study by WDS.

You've seen them: cheap phones from no-name Asian manufacturers plastering TV commercials and advertisements, mainly targeting new owners and users who don't care about the latest and greatest experience. The same thing is beginning to happen in the tablet market, too.

The problem arises from the parts used in the hardware. The phones are sold at cutthroat margins, and the materials that are used aren't exactly of the finest quality. This means that hardware failures are a lot more common in cheaper Android handsets than say, Apple's iPhone or Samsung's Nexus S. Google's software updates may even be too much for some of these devices to handle. WDS Marketing vice-president Tim Deluca-Smith said that it costs a mobile operator on average $130 in service, transport, and replacement fees for each device that is returned. This could add up to as much as $2 billion in losses for the telecos faced with servicing the devices.


Pricing is one of Android's main draws for many people. Since Google gives the OS away, manufacturers have fewer costs (aside from those 'small' licensing fees to Microsoft) on Android phones than Windows Phones, for instance. This translates to more sales towards budget savvy customers, and Deluca-Smith said that although the devices are selling, that's because of the inconsistency in handsets. “Android is a bit of the Wild West.” Unlike Microsoft, which enforces strict rules on manufacturers, or Apple, which manufactures its own iPhone, Google has no polices on design or quality. This leads to serious fragmentation. Still, it's not too late to fix the problem. “It's clear from the evidence in this study that if they are to maximize their investment, they must better manage how they bring Android products into their network, retail them and support them,” Deluca-Smith said.

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