At the recent New York Tech Meetup (a monthly event where 700+ geeks preview new technologies), some students from Brown University demonstrated a game where people in the audience could use their phones to battle each other in a real-time tank warfare game. The game was projected on the venue’s giant theater screen. It was not a game for iPhone or Android. The game could have been played on a payphone: Players dialed in and controlled their tanks using touch tone numbers on their keypads. The demo was awesome, even without a fancy touch screen.
News websites and tech blogs are brimming with stories about iPhone, Android, BlackBerry, and dozens more smartphone varieties. Apple just topped 300,000 apps, and worldwide smartphone sales grew 50% in the past year.
But the non-smartphone industry (“dumbphones,” as some call the handsets), has kept pace with some fresh innovation of its own. New York-based group-texting startup GroupMe just raised $850,000 from high profile investors like First Round Capital (Mint, StumbleUpon) and Betaworks (Bit.ly, TweetDeck). Other dumbphone-friendly startups like Snaptu and Fast Society are making waves, and mobile donation platforms that cater to non-smartphones are skyrocketing in popularity.
Given the meteoric rise of the smartphone, why would anyone invest in dumbphones right now? For one, “dumbphone” is probably a misnomer; the real market for mobile innovation includes phones of all IQs. Here are four reasons why the “everyphone” space is bursting with potential.
1. Market Penetration
People bought nearly 62 million smartphones in the second quarter of 2010 (according to Gartner research). But compared to the 264 million new “dumbphones” sold in the same quarter, all those iPhones, Androids, and BlackBerrys are just a drop in the bucket.
“The latest figures suggest that some 90% of the world’s population now has access to a mobile phone,” says Patrick Meier, a director at the crisis-mapping non-profit Ushahidi, which tracks human rights violations around the world by allowing people to report via SMS, Twitter, and even landlines. “We are designing the Ushahidi platform in such a way that there is no single point of failure.” By catering to the lowest common denominator in mobile communication, Ushahidi has been able to respond to disaster and violence situations from Haiti to Kenya, and beyond.
Dumbphones rule the developing world, and at current growth rates, it will be years before smartphones outpace the rest of the market worldwide. The limiting factor isn’t price, but rather the availability of mobile broadband. The lack of 3G broadband in developing countries will keep dumbphones on the map for a long time. Although smartphone sales are growing at double digit rates –- we noted 36% in the U.S. earlier this year –- smartphones won’t be as popular as regular phones in the U.S. until Q4 2011 or Q1 2012, according to Nielsen.
2. You Can Build Apps for Non-Smartphones
Don’t think that smartphones are the only mobile devices that let you check Facebook. Mobile startup Snaptu, as well as Microsoft’s OneApp, provide software that let feature phones access popular apps like instant messengers, social networks, feed readers, news and sports updates. Companies can build apps and port them to dumbphone platforms, or even develop cloud apps based on SMS.
Twilio, for example, provides tools to build apps for SMS or voice, and allows the code reside in the cloud so less capable phones can access it.
3. SMS Doesn’t Go Away When You Upgrade
“I think we are going to see a lot of amazing things happening in the SMS space,” says Matthew Rosenberg, co-founder of Fast Society, which recently launched an app that allows users to throw together temporary groups for parties or events of any kind, with instant conference calling and group texting. Since Fast Society is based on SMS, it works on any phone — dumb or smart.
“People are people, and we wanted everyone to be able to come party,” Rosenberg says. “Why exclude anyone?”
Mobile donations are another area that could have been limited to a smartphone app, but by using SMS, organizations like the Red Cross have been able to raise millions for charity.
“Done correctly, mobile giving has the potential to raise [organization]-transforming amounts of money for a cause,” says Jim Manis, chairman and CEO of the Mobile Giving Foundation, which provided the technology for the more than $43 million donated via mobile during the January 2010 Haiti earthquake. “It has the ability to acquire and engage new, younger donors and at response rates higher than other channels.”
Companies like Venmo (slogan: “Text money to anyone with a phone”) are evidence that SMS-based payment for everyday goods and services is on the rise as well.
The model for this new wave of mobile innovators is to build apps and phones that work for everyone, but to include advanced features for those with more capable phones.
“We start on SMS as our fundamental building block, but we’re already building the layers on top of it,” says Jared Hecht, co-founder of GroupMe. “Data, location, planning, group buying — these are all things that necessitate a smartphone.”
He continues, “The best thing about [what we’re doing] is you only need one person in your group to have a smartphone, or be smartphone savvy, to utilize these tools [and] to make them effective for the whole group.”
4. There’s Money on the Table
There are more than 4.6 billion mobile phones in the world, and there is at least half a decade or more until dumbphones stop being relevant. That means billions of dollars are on the table for innovators in the feature phone space.
The future of mobile is here, and it’s even in the phones you’d least expect. “For years, people have been saying that mobile is right around the corner,” says Hecht. “That’s not the case anymore… It’s an exciting time to be here.”
Marketing to the lowest tech denominator isn’t shortsighted in the case of mobile devices; it’s grabbing more of the market. Even as the dumbphone market shrinks, clever companies with useful apps should be able to keep their converts no matter what phone they upgrade to.