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$10 smartphone at Verizon Wireless

The handset market is one big sale this season, if you conveniently ignore the service contract gambit that recoups a carrier’s investment in the subsidy that makes mobile phones artificially cheap.
Just last week, one analyst noted that the new $200 price ceiling for smartphones would have been unimaginable only months ago, but looking ahead that figure is looking a bit steep. In other words, the carriers’ aggressive marketing and subsidizing of top-end smartphones – chasing consumer interest and resulting data revenue – has further reset consumer expectations.
Shape sells
One expectation, however, may well have influenced one bargain currently on Verizon Wireless’ shelves: consumers apparently think that smartphones should look smart, and that typically means large screens and QWERTY keypads, if not touchscreens. Chubby clamshells with stubby antennae are only for voice, right?
Though the jury may be out on that question, it appears to have a verdict in mind. Motorola Inc. tried a Microsoft Corp. Windows Mobile-powered clamshell dubbed the MPx200 in 2003, to little fanfare. Research In Motion Ltd. currently has the Pearl Flip at T-Mobile USA Inc. ($100 with two-year contract), but that clamshell-style smartphone doesn’t appear to be flying off the shelves, according to analysts.
Nonetheless, with consumer spending in the tank and this somewhat sketchy history of clamshell smartphones, Verizon Wireless has discounted its PN-820, made by Pantech for UTStarcom/PCD, to $10 in an attempt to entice consumers and, apparently, to clear out inventory. The PN-820 first hit Verizon Wireless’ shelves in April 2007, a veritable eternity in terms of the United States market. Since then, innumerable smartphones, led by Apple Inc.’s iPhone – most if not all of them looking quite smart – have recast the landscape.
Time warp
Delve into the specifications and you’ve effectively traveled back in time some 20 months in an industry that morphs by the day.
The phone runs on Verizon Wireless’ CDMA2000 1x EV-DO network, it runs Windows Mobile 5.0, includes an Internet Explorer browser, a 1.3 megapixel camera, Bluetooth, outer and internal screens, an MP3 player and PIM functionality. The external antenna is fetchingly retro, perhaps.
Okay, but it’s only $10! Surely Americans can see for themselves that this baby is delivering more functionality than the entire Apollo space program did a mere 40 years ago! Think what the Egyptian pharaohs could have done with this gadget! (Oh, wait…)
“Our customers are getting a great deal,” said Brenda Raney, spokeswoman for Verizon Wireless.
But, she acknowledged, “that phone is near the end of its (shelf) life,” and the name of the game now is large displays and QWERTYs. The PN-820’s sturdy build, however, might well make itself useful to small enterprises with workers in the field, she gamely added.
Analyst Avi Greengart at Current Analysis, who assiduously tracks the latest devices, also gamely considered the PN-820. Despite the holidays, however, he remained unmoved by its charms.
“That’s an ancient device,” Greengart said. “It never sold. Ten dollars is a fire sale.”
“This is simply an acknowledgement that U.S. consumers aren’t interested in smartphones that don’t look like smartphones,” Greengart said. “A QWERTY keyboard is a visual indicator of ‘smartness’ to the harried consumer. No QWERTY translates to a confused value proposition.”

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