John Sculley’s New Venture – The Obi Worldphone

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.

Published by

Tim Bajarin

Tim Bajarin is the President of Creative Strategies, Inc. He is recognized as one of the leading industry consultants, analysts and futurists covering the field of personal computers and consumer technology. Mr. Bajarin has been with Creative Strategies since 1981 and has served as a consultant to most of the leading hardware and software vendors in the industry including IBM, Apple, Xerox, Compaq, Dell, AT&T, Microsoft, Polaroid, Lotus, Epson, Toshiba and numerous others.

953 thoughts on “John Sculley’s New Venture – The Obi Worldphone”

  1. I’ll wait for actual reviews to decide if the phone is any good, it does seem to have the potential to be, but so do a lot of others (current stars in this price range are the Lenovo Zenphone 2, Alcatel Idol 3, Moto G, Honor 4X, Huawei G7…).

    The design seems weird for weirdness’ sake though:
    – the materials seem nice, the 25% of users who don’t use a phone case probably care, the 75% who do and which I belong to won’t/shouldn’t care much.
    – the phone is rather ugly, the screen seems slapped into the body.
    – and it seems very unpractical, fragile and high-maintenance, with a) a raised screen that’s bound to be very vulnerable to scratching and bumps (my phone’s “safe” position is screen-down on a table, raised just enough by its case so the screen doesn’t make contact… that won’t work here), and b) lots of nooks and crannies all around the screen for grime to accumulate into.
    – lots of bezel ?

    Reply

    1. I am just as skeptical as you are. Sculley hugely misled Apple once before, and the potential issues with the small details that you note, seem to be very reminiscent of words that Steve Jobs said.

      You know, one of the things that really hurt Apple was after I left John Sculley got a very serious disease. It’s the disease of thinking that a really great idea is 90% of the work. And if you just tell all these other people “here’s this great idea,” then of course they can go off and make it happen.

      And the problem with that is that there’s just a tremendous amount of craftsmanship in between a great idea and a great product. And as you evolve that great idea, it changes and grows. It never comes out like it starts because you learn a lot more as you get into the subtleties of it. And you also find there are tremendous tradeoffs that you have to make. There are just certain things you can’t make electrons do. There are certain things you can’t make plastic do. Or glass do. Or factories do. Or robots do.

      http://tech.fortune.cnn.com/2011/11/11/steve-jobs-the-parable-of-the-stones/

      The Obi smartphone is a noble idea with maybe a great design (I can’t really comment) and a great price. But that’s not enough. That’s still just ideas. That’s still just Sculley as he always was. The test is in whether he has injected craftsmanship into the product and whether he has tackled the subtleties. The jury is still out on this.

      Reply

      1. There are now formidable OEM manufacturers in China and Taiwan that make phones for others such as Xiaomi. The world is a lot different than it was 20 years ago when it comes to manufacturing resources.

        Reply

        1. If you are only creating mediocre phones from mediocre components, well yes, you might not bump into problems.

          However, if you want to make a cheap phone using quality components, then you have an issue. Quality components do not grow on trees, and as I understand it, demand for Sony cameras for example outstrip supply. You would have difficulty procuring them, when for example, Apple is ramping up production.

          “Samsung admits not all Galaxy S6 handsets use Sony image sensor”
          http://m.hexus.net/ce/news/mobile-phones/82981-samsung-admits-galaxy-s6-handsets-use-sony-image-sensor/

          Also, if you are operating on razor thin margins, you’ll probably have to manufacture in large batches but also carefully manage inventory. That’s not easy. I expect it’s why Xiaomi flash sales strategy works so well for them. I don’t see Obi succeeding without similar innovations.

          Reply

  2. Better and cheaper. Now exactly how will they do that? Are they going to deploy some new secret process that now makes components cheaper to manufacture without any hit to quality?

    Now maybe you can do better-looking and cheaper, but I am highly skeptical of better and cheaper. Most of the guys who use that sales pitch turn out to be a bunch of snake oil peddlers. ‘Better and cheaper’ turns out invariably to be ‘cheaper because its crappy’.

    Reply

    1. I guess you haven’t seen phones yet. I’m using a $111 phone . It has a 1.3GHz octa core processor, 2GB RAM, 32GB internal storage and 4000mAh battery. The screen is 720p HD. And the design is brilliant.

      It is not Obi, Obi phones in Kenya are generally ugly, but it beats very many devices in price and design. And yes all phones in this part of the world are unlocked.

      Cheap isn’t necessarily crappy as people would like to believe. Some companies just rip people of.

      Reply

      1. I would have thought that people know by now that specs do not indicate quality. The more important question is, Is the product durable? How much support does the manufacturer offer? How long is the true useful life? No matter how vehemently you insist, a smartphone, or any computing device for that matter, wherein the key components and the OS are optimized to work together will invariably outperform those built using off-the-shelf components and software.

        Yes, some companies just rip people off. And if you’ve observed the tech industry long enough, you would have noticed that the rip offs are the products that look amazingly cheap which turn out to be worth even less than the what you paid for it.

        Reply

  3. The official obi smartphone website has pretty dope devices. They recently launched in Kenya but the devices they are offering are not exciting as they would want us to think. Some are outright ugly.

    Kenya is a unique market. Pretty much every big smartphone company is officially in Kenya. Well expect for Apple. Name them: Huawei, Samsung, HTC, Microsoft, OPPO and all the rest.

    But neither of them, Samsung was recently toppled, owns the largest share of the market.

    The companies which own the market are from some not known Sheghzen Holding in China.

    Why do they own a big chunk of the market? Well it’s simple:Pricing.

    TECNO mobile for example has smartphone ranging from $40 to $350. And these devices are very well designed. So how do they beat known brands? By offering better.

    See this, a Samsung phone that costs $100 will have a 5MP camera with a 4.0 inch screen, 4GB internal storage, and between 1400 to 1800mAh battery. The display will be of very low resolution and the RAM will be less than 768MB.

    At the same price one can get a 5 inch phone with 720p plus screen resolution, 1GB+ RAM, Quad core processors and 16GB internal storage. Battery would be between 2000 to 4500 mAh.

    Which would you go for?

    At first these phones were called “china” and people avoided them but slowly they took over the market.

    If obi are serious about “poor countries” they have to better their game and not just write stuff online on how they are going for the low end market. For one, how many towns in Kenya have Obi smartphone shops? Only one! Nairobi. Yet Kenya has very very many towns with people looking for smart phones.

    A good example for Obi would be Infinix who launched recently in Kenya but have the highest number of smartphones sold in Kenya in 2015. How did they do it? Very little mainstream advertising but very good online sales. They partnered, I guess with Jumia.co.ke and that’s why everyone in Kenya has heard of their Hot Note.

    Reply

  4. Super excited about Obi Worldphone! I think this is the best someone can offer at the given price range. Hope they turn out as good as they look.

    Reply

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