Stop me if you have heard this story before. T-Mobile is selling four different smartphones that run Android at prices less than $100 starting on November 3. While all of the phones have technical specifications that are less than top of the line phones from Motorola and HTC, they also have unheard of prices for smartphones. The T-Mobile Comet will cost $9.99 after a $50 rebate and a two year contract, and it has a 528 Mhz processor, 2.8-inch display and a 3.2 megapixel camera. Prices of the remaining phones cost $29.99 (LG Optimus T), $49.99 (Motorola CHARM), and $99.99 (Motorola DEFY), all after $50 rebate and a two year contract.
While it is nice to see smartphones at such affordable prices, the big question is whether they perform well enough to provide a good user experience. The worst thing that can happen to Android is that because it is running on underpowered hardware people conclude that the operating system is not very good. Kevin Tofel took a look at the LG Optimus T handset and says that it provides a reasonably good experience for the price. The Optimus cost $29.99 after rebate.
The news about these new phones cannot be received well by Apple or Microsoft. The irony is that Google is doing to Microsoft and Apple what Microsoft did to Apple in the late ’90s. Apple must feel a sense of deja vu seeing lower priced smartphones coming to market, which is similar to how the price of Windows PCs dropped. While many Windows PCs had inferior hardware to Macs, people bought them up because of their lower price. Microsoft actually could be the most impacted by cheaper smartphones because it targets the same feature phone market as Windows Phone 7, which is a week away from being available for sale in the United States. Microsoft has stipulated hardware requirements for Windows Phones that make it nearly impossible to reach the lower prices of these Android phones. The real irony is that Kin might have been better positioned to take on lower priced Android phones.
Of course, one key thing to keep in mind is that so far these lower priced smartphones are being sold by only one carrier in the U.S., T-Mobile. Until all of the mobile carriers in the U.S. start selling Android smartphones at these low prices, the threat to Apple and Microsoft is not as great. However, I am sure that all of T-Mobile competitors will be watching this development closely, and if T-Mobile starts to threaten their market share you can bet they will be scrambling to add low priced smartphones to their phone line up.