How cheap can you make a phone?

Recently, I paid $12 at Mingtong Digital Mall for a complete phone, featuring quad-band GSM, Bluetooth, MP3 playback, and an OLED display plus keypad for the UI. Simple, but functional; nothing compared to a smartphone, but useful if you’re going out and worried about getting your primary phone wet or stolen.

Also, it would certainly find an appreciative audience in impoverished and developing nations.

$12 is the price paid for a single quantity retail, contract-free, non-promotional, unlocked phone — in a box with charger, protective silicone sleeve, and cable. In other words, the production cost of this phone is somewhere below the retail price of $12. Rumors place it below $10.

This is a really amazing price point. That’s about the price of a large Domino’s cheese pizza, or a decent glass of wine in a restaurant. Or, compared to an Arduino Uno (admittedly a little unfair, but humor me):

How is this possible? I don’t have the answers, but it’s something I’m trying to learn. A teardown yields a few hints.

First, there are no screws. The whole case snaps together.

Also, there are (almost) no connectors on the inside. Everything from the display to the battery is soldered directly to the board; for shipping and storage, you get to flip a switch to hard-disconnect the battery. And, as best as I can tell, the battery also has no secondary protection circuit.

The Bluetooth antenna is nothing more than a small length of wire, seen on the lower left below.

Still, the phone features accoutrements such as a back-lit keypad and decorative lights around the edge.

The electronics consists of just two major ICs: the Mediatek MT6250DA, and a Vanchip VC5276. Of course, with price competition like this, Western firms are suing to protect ground: Vanchip is in a bit of a legal tussle with RF Micro, and Mediatek has also been subject to a few lawsuits of its own.

The MT6250 is rumored to sell in volume for under $2. I was able to anecdotally confirm the price by buying a couple of pieces on cut-tape from a retail broker for about $2.10 each. [No, I will not broker these chips or this phone for you...]

Of course, you can’t just call up Mediatek and buy these; and it’s extremely difficult to engage with them “going through the front door” to do a design. Don’t even bother; they won’t return your calls.

However, if you know a bit of Chinese, and know the right websites to go to, you can download schematics, board layouts, and software utilities for something rather very similar to this phone…”for free”. I could, in theory, at this point attempt to build a version of this phone for myself, with minimal cash investment. myself. It feels like open-source, but it’s not: it’s a different kind of open ecosystem.

Introducing Gongkai

Welcome to the Galapagos of Chinese “open” source. I call it “gongkai” (公开). Gongkai is the literal translation of “open” as applied to “open source”. I feel it deserves a term of its own, as the phenomenon has grown beyond the so-called “shanzhai” (山寨) and is becoming a self-sustaining innovation ecosystem of its own.

Just as the Galapagos Islands is a unique biological ecosystem evolved in the absence of continental species, gongkai is a unique innovation ecosystem evolved with little western influence, thanks to political, language, and cultural isolation.

Of course, just as the Galapagos was seeded by hardy species that found their way to the islands, gongkai was also seeded by hardy ideas that came from the west. These ideas fell on the fertile minds of the Pearl River delta, took root, and are evolving. Significantly, gongkai isn’t a totally lawless free-for-all. It’s a network of ideas, spread peer-to-peer, with certain rules to enforce sharing and to prevent leeching. It’s very different from Western IP concepts, but I’m trying to have an open mind about it.

I’m curious to study this new gongkai ecosystem. For sure, there will be critics who adhere to the tenants of Western IP law that will summarily reject the notion of alternate systems that can nourish innovation and entrepreneurship. On the other hand, it’s these tenants that lock open hardware into technology several generations old, as we wait for patents to expire and NDAs to lift before gaining access to the latest greatest technology. After all, 20 years is an eternity in high tech.

I hope there will be a few open-minded individuals who can accept an exploration of the gongkai Galapagos. Perhaps someday we can understand — and maybe even learn from — the ecosystem that produced the miracle of the $12 gongkai phone.

Google will refresh its Nexus 7 tablet this summer, launching a new version powered by Qualcomm’s Snapdragon processor around July, according to Reuters– which is about a year after it launched the original Nexus 7. The news agency said two unnamed sources also told it Google is aiming to ship between six and eight million of the tablets in the second half of the year.

Google has not released official sales figures for its $199 to $249 slate, which is made by Asus, but an analyst estimate pegged sales for 2012 at between 4.5 million and 4.8 million, suggesting Mountain View is hoping to grow Nexus 7 sales significantly this year – even by as much as almost double.

According to Reuters’ sources, the forthcoming version of the Nexus 7 will get some hardware improvements, with a higher screen resolution and a thinner bezel design both being mentioned. It will also use Qualcomm’s chipset in place of Nvidia’s Tegra 3 which was used in the original Nexus 7s. Qualcomm’s chip was chosen over Nvidia’s for “power reasons”, according to one of the sources. The slate will continue to be co-branded with Asus.

If Google is hoping to significantly ramp up Nexus 7 sales it’s possible it will drop the price to encourage adoption but Reuters’ sources said pricing is “yet to be determined and Google’s plans are fluid”. One option is for Google to retain the $199 entry level price. Another is to price the slate even lower, at $149, according to one of the sources. The old model would be discontinued. A key factor that could determine how Google ultimately decides to price the Nexus 7 is if Apple launches new iPads this year.

Reuters goes on to quote Fubon Securities analyst Arthur Liao noting that a ”zero-margin strategy” plays to Google’s core business strengths — underlining the reasons for Google to push the Nexus 7 price lower. “Ninety-seven percent of Google’s revenue comes from advertisement, so it needs to sell more mobile devices in order to reach more consumers,” he told the news agency.

Last fall Amazon refreshed its Kindle Fire line-up of tablets, including dropping the price of the old model to $159. So a $149 Nexus 7 would undercut Amazon’s cheapest slate — at least, for now. Last month Amazon was rumoured to be working on building a $99 tablet– a rumour the company denied, telling TechCrunch:“We are already at the lowest price points possible for that hardware.”

Now this is cool: A group of web hackers has built a P2P-based CDN that crowdsources the delivery of data on a website with the help of a bit of Javascript. PeerCDN as the project is called, is based on WebRTC, an emerging technology that’s been built to facilitate real-time communication like voice and video chat in the browser without the need for any plugin. From the PerCDN website:

“PeerCDN automatically serves a site’s static resources (images, videos, and file downloads) over a peer-to-peer network made up of the visitors currently on the site. Offloading part of the web hosting burden to site visitors reduces bandwidth costs.”

The project also made a screencast to explain their approach – check it out:

PeerCND uses WebRTC’s data channel protocol, which was designed to allow developers of real-time communication applications to have their participants exchange data other than audio or video. Think of a file transfer during a teleconference, or a multiplayer game based on WebRTC. And in the case of PeerCDN, it sends files of a website directly from visitor to visitor.

The downside of this approach is that WebRTC is still in its infancy. The data channel protocol has been implemented in Chrome as well as nightlies of Firefox, which means that it will be available to the average Firefox user some time in the near future. Both browsers together “account for 58% of global browser usage,” as the PeerCDN site points out.

However, disputes around the way forward for WebRTC have complicated an implementation in Microsoft’s Internet Explorer, and there is no word yet from Apple whether it will support the technology in Safari. Still, site owners don’t necessarily need all of their visitors to buy in, especially since PeerCDN can be combined with a traditional CDN.

PeerCDN was built in part by Feross Aboukhadijeh, who is famous for some of his HTML5 exploits. Recently, Aboukhadijeh built a website that automatically filled up its visitors hard discs with gigabytes of cat pictures. Before that, he built a YouTube search site called YTInstant.

Imagecourtesy ofFlickr userTsahi Levent-Levi.

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