Firefox OS – Cheap is cheerful

RFM AvatarSmall

 

 

 

 

 

It’s a sell-out but for the wrong reason.

  • The first version of the Firefox OS device, “The Open” by ZTE, appears to have sold out in both the UK and the US.
  • The budget smartphone was selling for £60 in the UK and $80 in the US will now not be available until the next production run.
  • This is of course is great PR but it always raises the question of how many were actually made available in the first place.
  • This is a pretty common tactic in the Apple era that I am certain that almost everyone practices.
  • Whatever the supply, it’s a good sign that the device has sold out as demand has clearly been stronger than I expected.
  • The promise of Firefox OS is mid to high level smartphone performance at a mid to high feature phone price.
  • If this promise is fulfilled then I can see very meaningful volumes.
  • However, the first iteration of this platform does not fulfil this vital promise and so it must be something else.
  • I suspect that the answer to this question is price.
  • The device is super cheap.
  • Android devices at the same price point offer poor performance and the greater simplicity of this device means that it should perform somewhat better.
  • I suspect that these devices will generate very little in terms of data traffic and that the use case that they will be put to will be very simple.
  • Such a low price means that fairly low demands will be placed on these devices and hence they should perform reasonably against expectations.
  • Application availability is going to be an issue but again at this stage the kind of user buying these devices is unlikely to demand cutting edge applications.
  • This is a good start for getting the devices into the wild but I really need to see the vital promise fulfilled before I get excited about the prospects for this ecosystem.

 

RICHARD WINDSOR

Richard is founder, owner of research company, Radio Free Mobile. He has 16 years of experience working in sell side equity research. During his 11 year tenure at Nomura Securities, he focused on the equity coverage of the Global Technology sector.