Customisable Smartphones: The Double-Edge Sword
Earlier, about a couple of months ago, some people announced the idea of a customisable phone known as PhoneBloks. Watch the following video to get yourself up to speed if you haven't heard of them.
Well Motorola, or rather Google, has announced Project Ara. Project Ara is taking PhoneBloks' idea further into the developmental stage by working with PhoneBloks and also volunteers and hardware developers who can help build this idea up.
The public raved at the idea of finally being able to customise their own mobile devices and couldn't wait for Project Ara to materialise into something real. Well before we all get carried away let us consider the few following issues that may surface.
Speed of Advancement
Of recent decades technological advancement in the consumer end has accelerated dramatically. We all remember days without the Internet, days of VCRs and cassettes. We remember spending weeks in libraries doing research for projects. Technology got slapped onto our everyday lives faster than many can cope. Now we are exploring the possibilities of printing food, living longer, replacing all paper with digital formats, and tucking powerful computers into our jeans pockets.
All this came at a price. The price most did not even realise they have been paying all these years. As advancement increased, the lifespan of a product decreased drastically. This is because the most high tech gadget this year will become obsolete even before it reaches the end of its one year lifecycle. So in order for tech companies to keep up they have to pump in tonnes of money into Research and Development. In order to recover the costs they will have to sell millions of units of these devices before the one-year lifecycle runs out on them. And in order to do that they will have to make these devices very expensive and very brittle, to encourage constant upgrades.
With customisable devices, there is no one device. Everything is a combination of a set of parts, very much like a tower PC. So technology companies will have to start building these parts instead of complete devices. These parts are cheaper and generate less profit in terms of quantum per unit sold. Which means the companies will make less money which in turn will lead to less profit and less drive to innovate as quickly as they are doing now. Unless of course they come up with a brilliant business model to take more money out of our pockets.
Lack of Branding
While the PC market continues to decline, Apple is still selling their iMac and Mac Pros with a smile. Why? The answer is simple branding. Consumers don't care what goes into the machines, as long as they can do what they want and still be happy with how the machines glow.
Consider this:
We have a shell, which is like a tower holding all parts together, built by Company A. Then different hardware companies will build their own parts like RAM, storage, processors, batteries and what-nots. In the end of the day who gets to brand this device? Customisable tower PCs have no brand because they have every brand inside. But because each brand is so insignificant by itself, none of them can claim 'ownership' of the device.
Without branding, a device is just a device. Sure it can do what it's suppose to do, like a RM50 handbag made of faux leather bought from the corner of Petaling Street. But it cannot be a Louis Vuitton Epi Leather simply because it's got no brand. This also brings us to the following problem with customisable phones which haunted almost every industry in the world: Piracy.
Piracy
Tower PC parts were almost always genuine because at the time of its prime, countries like China did not have the skills to copy such advanced products. One will be called a fool if he/she thinks the same today. If tech companies make phone parts that can only last a year because they hope to duplicate the same business model they used with smart phones, what will make them any better than pirated parts that can last, say, a year? Sure they will be half a lifecycle behind the most advanced technologies, but how many of us are actually keeping track?
Another encouragement for consumers to choose pirated goods is the fact that the products lack proper branding. Without branding, anyone can plant anything into their devices and call it whatever they want and nobody will ask. Chinese copycats will thrive in this market, leaving actual innovators and creators without proper profit generating mechanisms. Before long many will close shop, leaving survivors clinging to branded companies in order to stay afloat. They will strike collaborative deals and supply exclusively to these giant companies, allowing the giant companies power to price the devices however they like. Sound familiar?
The Paradox
The equation doesn't make sense here. Tower PCs are on a decline for a very valid reason. Consumers are more worried about the brand of their machines than how much can be done with them. Taking smart phones into the customisable form is like bringing technology backwards into the stone ages. Sure we will be happy for a while because we can finally choose what we want to put into our phones to make it better for our personal usage.
But what happens when there are ten types of processors to choose from and twenty different camera lenses? To what extend will regular consumers spend time researching on these little things when they can have one device that can give them the best of everything? Note here also that I am referring to 'regular' consumers because they so happen to make up more than 90% of the world population, which is important for profit-generating companies.
I'm not a person who supports Apple's business model because it's a direct reflection of a Totalitarianism government, but I think in this case Apple's model stands triumphant.
With customisable devices, there is no one device. Everything is a combination of a set of parts, very much like a tower PC. So technology companies will have to start building these parts instead of complete devices. These parts are cheaper and generate less profit in terms of quantum per unit sold. Which means the companies will make less money which in turn will lead to less profit and less drive to innovate as quickly as they are doing now. Unless of course they come up with a brilliant business model to take more money out of our pockets.
Lack of Branding
While the PC market continues to decline, Apple is still selling their iMac and Mac Pros with a smile. Why? The answer is simple branding. Consumers don't care what goes into the machines, as long as they can do what they want and still be happy with how the machines glow.
Consider this:
We have a shell, which is like a tower holding all parts together, built by Company A. Then different hardware companies will build their own parts like RAM, storage, processors, batteries and what-nots. In the end of the day who gets to brand this device? Customisable tower PCs have no brand because they have every brand inside. But because each brand is so insignificant by itself, none of them can claim 'ownership' of the device.
Without branding, a device is just a device. Sure it can do what it's suppose to do, like a RM50 handbag made of faux leather bought from the corner of Petaling Street. But it cannot be a Louis Vuitton Epi Leather simply because it's got no brand. This also brings us to the following problem with customisable phones which haunted almost every industry in the world: Piracy.
Piracy
Tower PC parts were almost always genuine because at the time of its prime, countries like China did not have the skills to copy such advanced products. One will be called a fool if he/she thinks the same today. If tech companies make phone parts that can only last a year because they hope to duplicate the same business model they used with smart phones, what will make them any better than pirated parts that can last, say, a year? Sure they will be half a lifecycle behind the most advanced technologies, but how many of us are actually keeping track?
Another encouragement for consumers to choose pirated goods is the fact that the products lack proper branding. Without branding, anyone can plant anything into their devices and call it whatever they want and nobody will ask. Chinese copycats will thrive in this market, leaving actual innovators and creators without proper profit generating mechanisms. Before long many will close shop, leaving survivors clinging to branded companies in order to stay afloat. They will strike collaborative deals and supply exclusively to these giant companies, allowing the giant companies power to price the devices however they like. Sound familiar?
The Paradox
The equation doesn't make sense here. Tower PCs are on a decline for a very valid reason. Consumers are more worried about the brand of their machines than how much can be done with them. Taking smart phones into the customisable form is like bringing technology backwards into the stone ages. Sure we will be happy for a while because we can finally choose what we want to put into our phones to make it better for our personal usage.
But what happens when there are ten types of processors to choose from and twenty different camera lenses? To what extend will regular consumers spend time researching on these little things when they can have one device that can give them the best of everything? Note here also that I am referring to 'regular' consumers because they so happen to make up more than 90% of the world population, which is important for profit-generating companies.
I'm not a person who supports Apple's business model because it's a direct reflection of a Totalitarianism government, but I think in this case Apple's model stands triumphant.
