Frustrated that mobile makers refuse to develop strong internethandsets for under $500, 3 parent Hutchison has created its own$179 hyper-connected phone under a new brand, INQ.
Some have dubbed it the "Facebook phone" as it is the first tofully integrate the social network into the phone's address bookand message inbox. The 3G handset has also been built around Skypeand Windows Live Messenger.
The INQ phone can be bought from 3 for $179 on prepaid or free on a$39 a month two-year plan. It will be available before Christmas.
Frank Meehan, the Australian chief executive picked to run INQ'sglobal operations, said while expensive handsets like the iPhone,BlackBerry and Windows Mobile devices grabbed headlines, 90 percent of phones sold were cheap, basic devices.
The trouble for carriers like 3 is that those cheaper phoneshave appalling, clunky internet features, so they are rarely usedfor browsing the web, equating to swathes of lost revenue formobile operators.
And with devices like the iPhone, which 3 does not sell, thehigh up-front cost for carriers means they have to charge heftyamounts for data plans just to earn a profit.
Announcing its second quarter results, Optus singled out highiPhone subsidies as putting a $44 million dent in its profits forthe three months to September 30.
"Frankly, we didn't have anything under $500 that was goodenough to push an internet package, so we went to Nokia and SonyEricsson and tried to get them to do it, couldn't, they weren'tready for it, so we said OK we're going to do this ourselves,"Meehan said in an interview.
"All of the vendors have spent billions on going after theiPhone, so what you've got is this huge range of very high-enddevices but nothing good for the 90 per cent of the market thatcan't afford it ... the only thing they've bothered to innovate isthe camera."
Pitched as an internet communications device rather than amultimedia-rich iPod replacement, the INQ phone's strength is inits software, even though a 3.2 megapixel camera and MP3 player arebuilt in.
Meehan's team has spent two and a half years designing thesoftware so that Facebook, Skype, Windows Live Messenger and emailare integrated into the device from the ground up and optimised torun on the 2.2-inch screen.
Users simply have to sign in to those services once and fromthen on they are always connected, with notifications of newmessages popping up along the top of the phone. Scrolling throughthe applications is achieved by pushing a single button on theside.
"It's making it really simple and really always on and it's inthe background - the customer doesn't have to remember to startanything up," Meehan said.
Warren Chaisatien, research director at communications marketresearch company Telsyte, said the INQ phone would fill a void inthe market as a recent study had shown there were no competentsmartphones at the $200-$300 price point.
"As people migrate from a regular phone or a 'dumb' phone to asmartphone for the first time, there's no offering in theAustralian market that accommodates those users," Chaisatiensaid.
When a contact is added to the phone's address book, as well asthe usual details there is room for their Skype, Windows LiveMessenger and Facebook accounts. The phone can be set toautomatically grab the latest profile photo and status update fromthe contact's Facebook account, which are displayed against theircontact details.
All of the above services are integrated into a single messageinbox. Making a call or sending an SMS is as simple as placing aSkype call or sending a Facebook message.
Unlike the iPhone, BlackBerry and Android phones, there will beno app store for INQ devices, so users are largely limited to thefour apps that come pre-installed on the phone and those found onthe Planet 3 portal.
The portal contains quick links to mobile-optimised sites suchas eBay, YouTube and MySpace.
There are also several widgets users can add to the phone's mainscreen including Yahoo! Weather, Google Search, a world clock andRSS feeds for up-to-the-minute news.
Meehan said the INQ range would be expanded to four or fivedevices next year, but he was "not interested in the slightest incompeting with the BlackBerrys and the iPhones".
Indeed, while the INQ phone has a web browser, it's not as slickor effective at surfing the open web as the iPhone, which displaysweb pages as they appear on a PC. With INQ, internet communicationis best done through the integrated apps.
Nigel Dews, CEO of 3, said: "If you compare it to an N95 or a G1[Google phone] you'll be disappointed, but that's a completelydifferent price league."
-Asher Moses