Complaining About the Smartphone: a Lesson in Diminishing Returns

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In the Times, Sam Grobar has written a great article — a great screed, really — about how much people love to complain about their smartphones even though they accomplish so much for so little cost. The gist:

Consider what a smartphone can do, and the devices it replaces, and its value increases. A refurbished iPhone 3GS is currently on sale by AT&T for $19. With the least-expensive data and voice plans and a two-year contract, a customer would pay around $1,800 over 24 months, including taxes and fees.

But to do all the things a smartphone can do without buying one, that same consumer would need to buy the following:

A cellphone (at least $800 over 24 months: $20 for a device, plus $25 or more per month on a prepaid plan, plus taxes and fees).

A mobile e-mail reader ($430: the Peek 9, an e-mail reader, is $70; two years of service costs $360).

A music player (an iPod Nano is $149).

A point-and-shoot camera (around $200).

A camcorder (around $200).

A GPS unit (they start at $80).

A portable DVD player (they start at $60).

A voice recorder (around $40).

A watch (around $30).

A calculator (around $10).

Total cost: $1,999

You would also need a sherpa to carry around all that gear, rather than slipping it into your pocket in one little box.

I shouldn’t be surprised by this any more but I still am: why, with so much progress in the world on so many dimensions, is there so much complaining about the very fruits of that progress?

The only answer I can come up with is that there are sharply diminishing returns on satisfaction. Other explanations?

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  1. Stuart says:

    Perhaps the future demand for smart phones is linked to their reputation and you could think of it as a game where complaining spurs innovative improvement.

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  2. Gary says:

    Although I agree that diminishing marginal returns is the main point, I’d throw in 2 others:
    1. Nobody would actually buy the whole list of kit you suggest, and redundancy carries a big weight ie people think they are carrying around, and paying for, specs they don’t need and don’t want and that weighs heavier than the benefits of the stuff they do want and need. For me, the voice recorder and video camera are the redundant parts…
    2. People just like to complain.

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    • bob says:

      Also, the smart phone cost itself should be substantially cheaper. Subsidizing phones through contracts has to die.

      Also, I use a prepaid plan with AT&T. Nationwide coverage and it’s $25 every 3 months. That’s $100 a year ($200 after two years). So there’s another $600.

      The reason people complain is because they feel trapped. They have to get in a contract. Plus they are paying more than buying all the devices individually.

      If the subsidization of smartphones through contracts were to stop, we’d see prices drop. As it is, people are dramatically overpaying for smartphones in what are essentially rent to own plans.

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  3. Kathy Applebaum says:

    You’re counting some things twice there. My cell phone (the one they give free with the cheap plan) has the point and shoot camera, voice recorder, watch and calculator built in.

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  4. Philipp says:

    That’s a surprisingly one-sided article. Obviously, that article misses the point that almost nobody actually uses all these devices. To get a fair picture you need to substract what you would not be buying.

    In my case:

    A point-and-shoot camera (around $200). Nope.
    A portable DVD player (they start at $60). Scratch.
    A voice recorder (around $40). Anybody still uses those?
    A watch (around $30). Still have one.

    Bottom line: my iPhone is still more than $300 to expensive in your calculation …

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  5. Philipp says:

    Sorry, forgot:

    A camcorder (around $200).

    Definitely don’t need that one.

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  6. Andy the Android says:

    Who’s complaining? I finally picked up a Google Android smartphone in January and can barely put it down. It’s a phone, email reader, browser, camera, video recorder, mp3 player, rss feed reader, and podcast listener, and it plays all the video games I care to play. The podcast feature alone is worth it to me. Instead of downloading the podcasts on my computer, plugging in my listener, copying the files over, waiting, disconnecting everything and then repeating ever few days, Google Listen downloads new podcast episodes to my phone when they are released.

    I replaced a phone, ipod and PDA with one smaller device that does more. No complaints here.

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  7. Harry says:

    Actually I do not really agree with the calculations…
    By “smartphone” I assume you mean an iPhone, a BlackBerry, an HTC or sth in that category.

    If that’s correct, then a lot of the features and services that a smartphone offers are already provided by other “not-so-smart” phones. Almost any decent mobile nowadays offers many of the things you said, with a minimum being a camera, a clock and a calculator. That already saves you $240 according to your prices, reducing the total cost to under $1800 that the total cost of operation of a smartphone would be.

    Some that go on the “medium end” often allow to play music and video files, even listen to radio, and might even have a video/voice recording feature and a 3G connection. These would save you about $410-480, but would probably cost about $100-200 more than a low-end mobile phone – still cheaper than a smartphone.

    So in the end, if you count it like that, the price does not really add up. I feel that this is why smartphones lost their “awe” sooner or later. They combine “everything” but their overblown price in fact includes a large chunk of “status marketing”. At the end of the day, you don’t really buy the new iPhone for the practicality but because “it’s the new iPhone!”. When it’s not the new one anymore, you are dissatisfied immediately and want the better one!

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  8. Reilly Brown says:

    To me, smart phones are cool gadgets and very impressive in all their capabilities, but the problem is that with all the things that they can do, they rarely do those things as well as devices singularly dedicated to the function.
    For instance, the list mentioned a watch as something a smart phone could replace, however my watch has a battery life of, like, YEARS! Plus, a smart phone doesn’t always have the time visible, depending on what else it’s doing. So, basically, it’s not as good at being a watch as a watch is.
    Many of the functions have similar issues, like load times, the need for constant updates, etc. Then there’s the problem of At&T dropping calls with the iPhone, which means that it’s not even that efficient at being a phone, which you’d assume is it’s primary function because it’s in the name!

    So, as impressive as it should be, it promises to be MORE impressive, so there’s a disappointment when it doesn’t live up to that.

    –Reilly

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    • stigant says:

      I agree with you in principal, but would like to point out a small detail: I’ve never owned a watch that would set itself to the correct time and time-zone, auto-correct for daylight savings, allow me to (easily) set multiple alarms etc. My smart phone’s clock does all that. Point being, that while it’s less convenient than your watch in some ways, it’s also better at a number of watch-related tasks.

      Now, to be sure, it’s conceivable that newer watches will have that functionality (hell, you can actually buy a wrist-band for an ipod-nano to get the same effect), but since they are coming out concurrently with smart phones, I’m more likely to forgo a new watch in favor of a smart phone than the other way around.

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