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I had to post this because I didn't see it mentioned anywhere else on the site with all the noted Google news yesterday. This is a pretty big deal when you think about it and really shows how Android phones could hurt Apple by undercutting their margins.

 

If you aren't familiar with the Galaxy Nexus, it is a pretty darn decent phone. It was released last November. The screen is 1280x720 pixels, 4.65 inches and that means it is 316 ppi, certainly retina level. It is a pentaband gsm phone, has 16 gigs of storage, HD front facing camera, dual-core 1.2 ghz, shoots video at 1080p and perhaps the only weak point in comparison to an iPhone 4s, has a 5 MP camera.

 

This device is completely unlocked, gets it's updates direct from Google so it has the latest and greatest form of Android when it becomes available and Google just dropped the price to....$350 total.

 

That means anyone with half a brain can buy one of these, slap a SIM from Straight Talk in and have unlimited talk, text and data (likely only 2 gigs before some action taken in throttling) for $45 a month. It means they can go to Walmart and get their $30 a month 100 min talk, unlimited text and data (claimed 4 gigs before throttling.)

 

In comparison Virgin Mobile is offering the iPhone 4s for $650 and Leap Wireless is eating some of the upfront costs and offering it for $500. You go and buy your iPhone 4s unlocked and contract free from Apple and it is $650.

 

Apple is always worth more to me. I just handed over $450 myself to upgrade myself to a used iPhone 4s and handed down my iPhone 4 to the wife. One of the reasons I did this is because was because it seems like half my friends are carrying around the new Droid Razr or Razr Maxx and they are pretty lust inspiring.

 

I understand that most folks are too clueless to take advantage of something like this. I fully get that they will walk into stores, point at a phone and sign a piece of paper or pretend to sign some LCD screen so they can subsidize something with overpriced service for 2 years.

 

At some point though, the differences in these numbers, they are going to start to be a big deal and in my opinion these numbers are too big to not start swaying the tech savvy. Much like how no satellite or cable company claims to be worried about cord cutters who now torrent or stream most of their needs, Apple needs to show some concern here. Clearly the new iPad showed that with regard to CPU, most people won't need quad core in their estimation and with regard to carriers and the choices they requested, they choose LTE over additional cores. To me it seems like the speed gains in CPU, GPU, camera and other areas of smartphone use are reaching the "good enough" stage for a while. That means the industry will go through a lot of cost cutting and consolidation. (Bye RIM and Nokia in all likelihood) Nokia in particular has noted how even though they did a pretty decent job of keeping costs down on Windows phone and still pushed out inexpensive series 40 phones but the reality is that there were off-contract $100-200 Android phones everywhere and they couldn't sell much because they paled in comparison. It was like a wave that crashed over them even with the foresight of their burning platform.

 

You go to Virgin Mobile and the iPhone 4s is $650, iPhone 4 is $550 and then the next phone you can buy is a $300 Android phone. There are half a dozen Android phones between $130-$230. Hopefully those prices will drop a bit when the next iPhone but the point is that even if Apple manages to take it up a notch, that advantage is lasting less time and is now clearly being overcome on price more quickly as well. The Galaxy Nexus is very well matched to the iPhone 4S yet it is almost half the cost. At some point in the future, these trends are going to have a troubling result for Apple if something about them doesn't change.

"During times of universal deceit, telling the truth becomes a revolutionary act." -George Orwell

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"During times of universal deceit, telling the truth becomes a revolutionary act." -George Orwell

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