Companies worldwide have shipped more than 50 billion ARM-based chips since 1993, with 10 billion of them in 2013 alone. Many of those chips ended up in smartphones and tablets, but ARM’s designs are also used for everything from servers, to laptops, to smartwatches. So if anyone in this world has a good idea of where technology is heading, it’s the folks at ARM.
At its second ever Tech Day event, ARM revealed some interesting statistics on the near future of mobile technology. The graph below is a clear illustration of a trend that’s been widely discussed in the past 12 months – the shift towards the mid-range and low-end in the smartphone business, caused by increasing saturation in developed markets. It’s the trend that, analysts say, caused Samsung’s recent growth slowdown, a problem that’s affecting in one way or another every company in the smartphone industry.
By 2018, ARM estimates that entry-level phones (under $150) will out-ship premium models by two to three times. Not only that, but in the entry-level segment, the race to the bottom will bring smartphones prices to as low as $20. Manufacturing limits prevent prices going down any more than that, thinks ARM.
While a $20 smartphone seems the stuff of fantasy, ARM says the first Android devices will hit the markets at this price point over the next few months.
Sure, don’t expect to see them at your local Best Buy anytime soon, but in developing countries, where smartphones are the primary computers of millions of people, $20 smartphones will make a real, lasting impact.
According to the chip designer, today it’s possible to make a $20 smartphone powered by a single-core Cortex A5 chip. That may not sound impressive, but as AnandTech notes, one Cortex A5 chip is faster than the chip inside the $599 iPhone from 2007.
With companies like OnePlus pushing down the price of premium Android smartphones to around the $300 mark, the barrier of entry to a quality smartphone experience is continuously lowering.
But it’s Motorola that’s rumored to be really pushing the envelope. The company teased a device that’s “priced for all” for its May 13 event, and speculation is that it will be the Moto E, an ultra-cheap device that might cost as little as $50. The company’s former CEO Dennis Woodside hinted at such a device back in January:
In much of the world $179 is a lot of money so there’s a big market at a price point of less than $179. We’re going to look at that and just delivering on that value promise is super important. I mean why can’t these devices be $50? There’s no reason that can’t happen so we’re going to push that.
If Motorola manages to offer a decent Android experience for $50, it wouldn’t be a stretch to envision a $20 brand name smartphone in a year or two. And that would be a big step towards a not-so-distant future where everyone on Earth is connected.