A few weeks ago, I had the privilege of having lunch with former Apple CEO John Sculley to discuss one of his newest ventures. Most know Sculley from his Pepsi and Apple days but, since leaving Apple, he has become one of our industry’s top speakers on tech and tech investment and has served as a mentor and confidant to many business leaders and tech startups. He is also a world traveler and, over the last 30 years, has spent time in India, Africa, and parts of Asia. During his travels, he has seen first hand what is called the “rising middle class” in many countries. The most notable rising middle class is China’s but, as Sculley told me, this is happening in nations all over the world. This middle class has new purchasing power and, in some countries, is driving economies upward.
As he traveled, he observed that, even in some of the poorest countries, demand for a smartphone by a large part of each countries population is very high. At Creative Strategies, our research shows there are approx 2.8 billion people who have either feature phones or smartphones and this tech has become a critical tool for them to communicate, socialize, learn, and buy things. In some nations, these mobile phones are the way they do most of their business transactions. Our research also shows that, over the next three to four years, another one billion people will buy smartphones for the first time and grow this mobile phone market exponentially.
Sculley saw that most of the smartphones in use were bought for under $150 and were of poor quality and mediocre design. He and his partners began to wonder if there was a way to create a smartphone that had very high quality yet could be priced no more than $200 and be attractive to smartphone buyers that desire a better product but at low prices. He knew they envied and wanted an iPhone but could never afford it. Our research shows there are at least one billion current smartphone users who plan to upgrade from cheap phones to better phones in the next two to three years.
So John and his team, which includes Robert Brunner of Ammunition, CEO of one of the top design studios in Silicon Valley, worked to develop the Obi Mobile Worldphone. The idea was to create a no-compromise smartphone, designed in Silicon Valley, using quality components, to create a great phone priced under $200.
Brunner helped design early PowerBooks, the Newton, and, most recently, Beats headsets. While Sculley is known as a marketer, he studied at the Rhode Island School of Design. Sculley and Brunner created an elegant and sleek smartphone that has a fiberglass body with metal trim, uses a 5-inch Gorilla Glass 4 screen, a powerful 8-Core Qualcomm 614 processor, a Sony created camera, and Dolby sound. SF1 (for San Francisco) has 16GB of storage and sells for $199. The 32GB model is $249. The SF1 has dual LTE SIMS and is an unlocked phone so it can be used just about everywhere — you can buy a local SIM card to activate it in each country.
The result is what I believe is the best Android phone under $200 and probably one of the best designed Android phones at any price.
They also have a $129 smartphone, model SJ1.5 (for “San Jose”), a 3G phone with a polycarbonate (aka plastic) case, a 5″ display with Gorilla Glass 3, and a more basic MediaTek chip and lower-end camera that could be used for the bottom end of these markets.
They know the market for smartphones in the US, Europe and even China are saturated, so their first target countries will be East Africa, Nigeria, South Africa, Vietnam, Turkey, and Pakistan. What I find most interesting about this new venture for Sculley and his team at Obi Mobile is that, like Apple, they see design as a critical element of whatever product they create. Sculley told me “Apple is a design-led company. We’ve said we want to be a design-led company, in an entirely different market than Apple would ever go into.” If you look at Xaiomi, MicroMax, Huwuai and other international smartphone competitors, their products make design a second or even third priority. Obi leading with design and high-quality components will help them stand out in this crowded market and could help them become a serious leader in world smartphones over time.
It is too early to tell how successful they will be but Sculley is a world-class marketer and, with the right team, great distribution agreements, and a compelling product like the SF1, they could end up being a powerful player in a market where close to a billion current smartphone users plan to upgrade. While there is a lot of competition in this space, I think the Obi Worldphone has a great chance to be highly competitive and get a good percentage of these upgraders over the next two to three years.