Nokia released two phones last week: one critically important called the Asha 501, and one simply iterative called the Lumia 925. Techmeme, at least, got the relative importance exactly backwards:
Not to blame Techmeme; few if any of their readers were the target market for the Asha 501, while the Lumia 925 is squarely aimed at the kind of folks reading this blog. But the truth is the Asha 501 is far more interesting.
Asha is Nokia’s evolved feature phone line, and the 501 is the newest model in that line. Based on Smarterphone, the successor to Series 40, the 501 will be sold for less than US$100; more importantly, it will have an SDK for 3rd-party developers, a first for Nokia’s low-end phones.1
At first glance, the 501 seems kind of pointless in a world of $100 Android smartphones. Consider this conclusion from GSM Nation:
The Asha 501 faces stiff and fierce competition from low-cost Android phones. Nokia’s Stephen Elop unveiled this phone in India, a key market for the Finnish phone manufacturer. At a price of nearly $100, the Asha is asking customers to leave Android phones that can be bought at this price point carrying superior tech. India has several local phone companies that offer a modern, dual-core Android experience at prices from just $120. Android brings with it the power of a burgeoning app store and the wonderful realm of rooting. The Asha 501 on the other hand, features a fresh OS and bottom-end hardware specifications.
When you look at the performance and the price, it’s not clear how the Asha can compete:
The red line in this graph is the price-performance frontier; the only competitive position is on this frontier.2 If you are inside of the frontier, that means there are competitors that have the same performance for a cheaper price, or have better performance for the same price.
Asha seems to be an example of the latter. It has worse specifications than a cheap Android phone, and a much worse app selection.3 Thus it has been largely ignored by a tech press that considers little more than features and price.
However, finding a market is about finding a new axis of differentiation. In the case of low-end smartphones, are there things that matter beyond price and performance?
Consider again where Asha will be sold: India, Africa, Latin America – all have markets where mobile phones are the primary form of computing, as well as areas without consistent electricity. In such markets, nothing matters more than battery life. From CNN:
The internet in Africa is entirely different to the internet used in the developed world. In America or Europe, the internet is generally something you surf on a computer or tablet — a device with a 10-inch to 15-inch screen.
In Africa, hundreds of millions of people will experience the internet for the first time on a 2-inch cellphone screen. Probably in black and white. And probably only as text…
The reason is simple: With a dearth of infrastructure, the vast majority of people (an estimated 1.5-billion globally, according to the UN) have no electricity. More people in Africa have a mobile phone than access to electricity. That means, for a phone to be functional, it needs decent battery life. These feature phones have anywhere up to a week.
Look again at what makes an ideal phone: a week of battery life, which necessitates a text-based screen and a dependence on SMS.
The Asha 501 blows this away: the battery life is amazing – 48 days on standby – and that color screen is looking much more impressive. And now there is an app platform to deliver drought alerts, health information, banking and more.
Suddenly, a graph of Asha’s competitive position looks much more promising:
Nokia is particularly well-suited to this market; their phones have always been the most durable, with the best battery life, and their distribution channel is still unmatched. If the company returns to prominence the headliner will likely be Asha, thanks to a strategy predicated on identifying a new axis of competition4 instead of simply trying to be a little bit better.
This article is not about the iPhone versus Android, and besides, I’m talking about low-end Android, not the Galaxy S4 or HTC One ↩
Incidentally, Lumias have the exact same problem, except they’re much more expensive as well ↩
I know the strategy isn’t new, but the SDK is ↩