Yesterday, Nothing announced that the next Nothing Phone (1) will not be available in the United States. There were a lot of people in the tech community resenting that they didn’t sell much of their devices in the United States and couldn’t ignore them when the first major device was launched. It may seem like a betrayal, or nothing that ignores millions of tech enthusiasts in the United States, but it makes sense not to start the phone (1) here. .. Please let me explain.
Brand loyalty is a big deal
Look, brand loyalty is one of the biggest sellers of products around the world, both inside and outside technology. In 2019, 90.2% of consumers reported that they were loyal to the brand. This is especially true for the US technology market. Customers using Samsung, Apple, and Google products are likely to continue to buy from the company, and it’s overwhelmingly difficult to break their loyalty. Most of this has no control over anything. Even so, customer acquisition costs (CAC) can be incredibly high and the marketing costs you spend on it are not worth it.
Phone (1) does not provide anything meaningful, even if you are not looking at anything at the technical level New features or specifications To make it worth the switch to the consumer. This is a $ 500 phone running a midrange processor with an average display, dual cameras and a boring design. Outside the LED on the back It is covered with a case. This device doesn’t provide any features that create FOMO (fear of miss out) for customers or allow them to leave a large amount of current and perhaps already large investment in the ecosystem. Samsung, Apple and Google brand loyalty is too strong to offer anything.
Nothing can compete with Google, Samsung and Apple without a carrier
Currently, there is no room for Nothing Phone (1) in the carrier. This is another $ 500 phone that isn’t actually brought to the table except for unusual designs. There are many better phones in the US market in that price range that carriers are already selling from much larger players. You cannot hire or manage career store salespeople to train store employees on the scale of Apple, Samsung, or Google.
You may be wondering why I am particularly focused on my career. Because it constitutes the US market.
According to a research group at NPD Connected Intelligence, there were 50.1 million active unlocked smartphones in use in the United States in 2020. That number is only 17% of the total number of active smartphones in the United States, which is 294.15 million. It doesn’t make sense to focus on the minority who are unlikely to want to buy a device, as it is not enforced by contracts or payment plans.
These other 244 million devices will be locked and sold to carriers, probably based on payment plans that are subsidizing the cost of the device. This will enable excellent financing transactions to maintain carriers and devices, but with a $ 1000 phone price and a down payment of $ 150, the current standard term for carrier financing in the United States, for 36 months. You can also spread it over $ 24 per month. handle. The average selling price of 5G phones in the US has recently been $ 815, and the $ 500 phone doesn’t seem to fit the market.
A $ 300 phone that can be offered as a trade-in or promotion on a new line will work for your carrier. And so is the $ 1000 phone that can raise money. A $ 500 funding plan doesn’t make much sense if the difference between it and the $ 1000 funding is about $ 10 per month (because a $ 500 phone usually doesn’t have a down payment).
On the other hand, spending $ 500 in cash is also possible if the Pixel 6, a commercial device with a well-known brand of excellent cameras and processors, is $ 600 and could be discounted outside of a mobile carrier subsidy. Has no meaning. Nothing Phone (1) is a phone that you don’t want to accept because there is no place in the market.
If you want to ignore the carrier, unlock the device and sell it, and provide your own money to sell the phone (1) through the website, you need to find a bank to handle the money. A bank like TD Bank is not Samsung itself, but a bank that handles the financing of companies like Samsung in Samsung’s funding plans. In volatile markets, banks may be willing to work with startups to finance such consumer devices. Without a carrier that subsidizes mobile phones, you wouldn’t expect big sales.
No US aircraft carrier needs its own flagship or very cheap device to enter the US market in a meaningful way. Nothing Phone (1) is neither of them, so in reality it can’t be put into the carrier store at this time.
It costs too much to launch on an aircraft carrier
Simply put, launching a phone in the United States costs a lot.
For example, T-Mobile’s Samsung phones have 38 mobile bands (35 without mmWave), as well as Wi-Fi, Bluetooth, wireless exchange, and NFC. These are all on Nothing Phone (1). All of these require FCC testing and approval and can be very expensive. Without this test, it would be illegal to sell your device in the United States. If the device does not comply with the FCC standard, it can require weeks or months of follow-up engineering to operate the device within the US standard, which is costly.
The FCC test itself is not very expensive, but the battery UL and carrier certification are expensive. Battery UL certification, which is tested to ensure that the battery meets nationally recognized safety standards, is optional, but is almost necessary in the United States and can cost tens of thousands of dollars. Career certification, on the other hand, costs millions of dollars. If your phone also includes mmWave, you will need a mmWave certification from Qualcomm and a license for a mmWave patent of up to 7 digits.In total, it can be incredibly expensive
There is also career certification. Manufacturers like Nothing need to send their devices to carriers such as T-Mobile, AT & T, and Verizon for testing on the network. This is not only for sale on these networks, but also for full access to the networks. If the phone (1) does not meet any of the mobile operator’s standards, you do not need to repair the phone and return it for testing. Not only will it take weeks, but it will also delay software updates, such as those found on Samsung phones. Without that carrier certification, AT & T wouldn’t be able to use Voice over LTE, T-Mobile wouldn’t have 5G, uneven (if any) services, and Verizon wouldn’t have any services at all.
Nothing is a startup, whether they like it or not
You might not think so because of Nothing’s hype, but the company is a start-up.
If you need money or parts like Xiaomi or OPPO, there’s nothing without the support of a billion-dollar multinational company. This means that we need investor and bank funding. This means debt, loans, and huge lines of credit.
Unlike most companies, the market can’t afford a phone breakdown. We cannot tolerate failure in order to be able to repay these debts. Spending millions of dollars on not paying it back is simply not sustainable.
There are also costs that continue after the device is launched. This includes carrier authentication payments for each renewal you try to push. If you make a monthly security update, it’s a monthly cost that’s only worth it if it sells well. If not, it’s just burning money. You might think, “If it doesn’t sell well, you just need to reduce your losses and get the latest information about the United States.” That’s even worse. Because that means all the major tech news and bad news from YouTuber, until you agree to burn more money, and perhaps burn the bridge with your customers. Take a look at Qualcomm’s recent use of Snapdragon Insiders phones.
Other than that, I have a US support line for customer service, a broken product repair program, a device warranty claim system, a distribution network for shipping devices, a warehouse for storing products, etc. You don’t need anything you didn’t have. t list. All of this is a pointless investment in a market where phones are destined to break down.
I saw some after this news about NothingPhone (1) not released in the US broke Twitter user “You can’t succeed unless you try it,” he says. Frankly, when it comes to taking millions of dollars of risk, it doesn’t work for startups. Failure of this product can mean that you cannot invest so much in future products, future growth, or support.
Do you think there is nothing to sell a phone in the US?
Even if it didn’t take long to launch in the US, I wouldn’t be shocked. I could see them waiting a couple of generations for a true flagship product. A true flagship device has developed in-house costs in the $ 100 million area. It is not possible to raise more than $ 100 million from funding and investors to create such a project, as it is likely to fail without brand loyalty and track record. This will take some time.
If nothing succeeds, we can’t make a great phone for the United States, but that’s not the case now. Instead, nothing creates a device that is known to appeal widely to everyone in a market that is inexpensive to enter.
If you can’t release the device in any generation, that’s fine. That way, you may be able to get what tech enthusiasts want. However, until then, a little patience is required. I have no idea what they are doing. I believe they will make the right decisions in the future.
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