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Fairphone 2 is way too expensive for me and many friends

finance
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#1

The Fairphone 2 is way too expensive for a bunch of people. Some hipsters might want to afford this but lots of other potential customers, for example those who spend a lot of time in volunteer, family or whatever work, are for sure not that rich. And they are not so keen on the latest technology that they would spend more than 500 EUR on a gadget for making calls, checking messages and takings pics every now and then.
This desription includes me but also a number of other people I know and whom I generally consider open for fair products.
Maybe you could offer one high tech and one lower tech fairphone.

Edit: Concerning the applications, I was a bit too short: Of course, many people want to use all common smartphone applications like web access and navigation and media, and would like to this fair, but still cannot afford 500 EUR.


Why the Fairphone is so expensive?
#2

There are quite a few discussions ongoing about the price of an FP2 and variants. The main issue is not the absolute high-tech hardware but mainly the low number of devices which are built. Well, and the modular design surely also plays a role, but is one main factor in the aim for sustainability.

The two following forum threads om to my mind that might be interesting in this regard:


#3

It may be useful to be aware that:

  • The forum is a community forum (and the moderators are also regular users), there is no guarantee that Fairphone staff will read everything posted on here (their team is too small for that).
  • Fairphone does provide an explanation for the cost, which have been discussed on the forum as well. The latest summary is in the topic linked below as well as others that can be found by searching the forum

Which is why the best advice that I could possibly give them is to buy a cheap second hand phone that does what they want it to do and would otherwise end up on landfill. This makes ethical and environmental sense. If security updates are important, look for a phone that is supported by (recent versions of) cyanogenmod and get your friendly neighbourhood geek to help set things up if necessary.

Also:

We’re designing the Fairphone to extend its usable lifespan, enable reuse and support safe recycling. But we like to say that the fairest phone available is the one you already own, so we’d like to encourage you to keep your existing mobile as long as it works.

Quote above from: https://www.fairphone.com/roadmap/lifecycle/


#4

I think with future Fairphones this could become true:

  • The newest Fairphone with new technology for a high price
  • Cheap, used older Fairphones from those who switched from an older to the newest Fairphone

#5

Thanks for your hints.

However, with this price policy, fairphone will affront a lot of people.
I bought my fairphone 1 back in 2013 for 300 EURs. That was okay. I cannot imagine that the costs have really grown by nearly 70 percent since then.
I use my fairphone 1 also for accessing the web when I’m away on business, for navigation and for listenning to music, so my descripition of the intended uses for potential customers was a bit too short.
I’m fine with the fairphone 1 and I’m gonna keep it. But when ‘fairphone’ send me an ad mail about fairphone 2 and asked me to spread this news I had to find that I would not dare to recommend one of my mates a gadget for 500 EUR.

Why is the fairphone 1 no longer produced?


#6

Because it wouldn’t be sustainable. Fairphone made the mistake to rely on a MediaTek SoC which wasn’t supported very well by the SoC manufacturer. The FP1 will never see any newer version than Android 4.4. The end-of-life of the FP1 is foreseeable.

If you (or your friends) want to have a FP1, there are many offers for used ones in our marketplace or on ebay.


#7

This idea reminds me a bit of what my relatives from West Berlin did with the clothes they no longer wanted to wear: They sent them to the family members in the former GDR; adding some chocolate…


#8

Back to the price question of 200 EUR between FP1 and 2 - maybe you could help me to better understand…

Tofra explained, concerning software, the FP2 is more sustainable than FP1. In the cost breakdown diagram for which Johannes posted the link, the development costs are depicted as around 30 EUR, so this should cover the costs for making FP2 more sustainable.

The by far biggest amount are the material costs of 230 EUR.

  • Is this the key to the enormous price difference between FP1 and FP2? But if so, what is the reason? Has the number and the amount of materials used for FP2 grown that much? Or are the producers of the materials so much better paid than they were back in FP1’s times?

#9

Unfortunately the cost breakdown for the FP1 (available here) is far less detailed, and only mentions € 185 as product cost (which is stated as € 340 for FP2, but there is a difference between the two models whether things like the worker welfare fund are listed as project or as intervention, so difficult to compare).
The modular design will mean higher production costs (glueing everything onto one board is cheaper), which do not fall under development costs. However, it won’t explain the full difference as assembly is an estimated €37.20.

Note that components may also be more expensive as the industry works in dollars, and since 2013 when the FP1 was being made, the Euro has lost somewhere between 15 and 20% of its value against the dollar. Based on the FP1 product being €185 originally, it would now be > €220*, due to the effect of currency value fluctuations alone (e.g. inflation is not taken into account). If we do assume a low inflation at 1%, costs in other parts of the breakdown of €15 that were actually in dollars, and a 20% VAT rate, the final price of the FP1 adjusted from 09/2013 (€325) to 09/2015 would be €377. Again, not the full difference, but it all adds up.

*Based on a September 2013 rate of € 1 = $ 1.34 and a September 2015 rate of € 1 = $ 1.12. The FP1 would now cost (185 * 1.34)/1.12 = € 221.34.


#10

Hi Schroeda!

Well, not necessarily, but the components are more powerful and thus more expensive. And I think this was an intended decision, because then the Fairphone 2 can be used for a longer time span, before people feel that their phone is too slow and not powerful enough and that they need a new phone. Moreover, future Android versions will also run smoother and more fluently without lags, and this contributes to the longevity as well.


#11

The FP1 is a modified version of an already existing chinese phone (it seems to be the Changhong Honphone V9), so a big part of the production setup and developpement and so on was already done. Which makes cheaper.

The FP2 with it’s modular design is unique and the production in such small numbers much more complicated and expensive.

There are some really interesting posts on the blog that explain why the FP2 is 500 € worth. I can recommend you reading them.


#12

hear hear!! Could not agree more


#13

Hi, just wanted to back Schroeda here. Not that I dont understand the answers but the price of the FP2 really is an issue for a lot of people imo. 300€ for the FP1 was already a bit high for me. I wouldn’t have bought a 300€ phone it if it wasnt “fair”. Now when people ask about my FP1 and finally tell me they also want a fair phone I know that going for the FP2 won’t be an option most of the time. Its a shame. I tried to promote the idea of the fair phone just by showing mine to everyone I could but in the end, nobody bought the FP2. Its too bad there is no fair mobile phone with lower tech spec and a lower price. It should be possible to produce a cheaper basic model. If someone produce it I m pretty sure they 'll have a lot of customers… One might even consider producing a fair mobile phone that aint “smart”. Just a telephone.


#14

Everything with lower tech specs and lower price in most cases means lower quality components (and exploitation of humans and nature).

So the higher the quality the longer the phone works. Given the FP2 is built for a lifetime of at least 5 years, this makes 105€ per year (or under 10€ per month). I think this is rather economical.


#15

I get that, no need to convince me that quality and fairness has a price :slight_smile:
Still, its 500€. Which means too much for a lot of people.
If what conventional products offer is too good to be fair, you have a choice: either you pay more to get it “fair” OR you lower your expectations/needs.
I dont need a touchscreen for a start! (this is what I mean by lowering tech spec, not reaching the same achievements with lower technical or human quality).

I dont mean to criticize FP. I just regret that there is only one and that its price, right as it may be, is too high for me and a lot of people.


#16

There’s a few problems with that “solution”.

  • Having two versions of the phone greatly increases production costs. You’ll need two separate production lines and two separate assembly lines.
  • The actual cost of the chipset in there will only be marginally lower if you choose to put last year’s SoC in there. Last year’s SoC might not even be available or in production anymore. The SoC manufacturer might choose to not support it anymore either, which is a risk.
  • Putting a smaller screen in there or less memory probably only pushes costs down only marginally.
  • Similar to the first point, you’ll need to support two different devices, which puts an added strain on the customer support as well as the software development side of things.
  • Having two SKU’s of the same product means it’s more difficult to keep stock. Simply said, your stock needs to be twice as large to keep shipping phones to people.
  • The increase in potential customers probably doesn’t offset the additional costs you have.
  • To recoup costs it’s not unthinkable that the high end version would be even more expensive than the current FP2 model while the low end version would be not that much cheaper than the current FP2 model.

So in short, having two versions of the same phone probably has an adverse effect on the cost of the device(s) and would most likely be a terrible decision from a business perspective.


#17

Curious, what do you think is a good price for a phone? The advent of sub-€200 phones has really only started with the arrival of the Moto G line of Motorola (not counting cheap knockoff phones that aren’t worth their salt). And to be honest, the price of the Moto G and Moto X phones makes me a bit suspicious towards them. How are they getting such relatively high quality phones for such low prices? Someone ends up paying for that.


#18

This is a related discussion:


#19

According to what some people write here, the FP1 must be a bunch of crap. Unsustainable, unfair, unuseful…

  • Well except for some problems with the USB socket, I’m still quite fine with it (knocking on wood). The 340 EUR were acceptable to me and I could afford them, although not easily. Not to be forgotten: Also FP1 was significantly more expensive than ‘unfair’ phones of the same power level!

Although a number of forum members has tried to explain the reason for the 180 EUR price rise, I still don’t really understand it. According to Johannes’ calculation, currency value alterations explain 50 of the 180 EUR.
But where exactly do the remaining 130 EUR go?
Some days ago I had asked for the reason of the dramatic rise in product and material costs:
FP1 had costs of 130 EUR for “design, engineering, components, manufacturing and assembly”.
In FP2, these costs sum up to 300 EUR - 230 of those just for material costs!

So I repeat my question:
=>> Has the number and the amount of materials used for FP2 grown that much? Or are the producers of the materials so much better paid than they were back in FP1’s times?
I hope for some answer a bit more detailed than telling me what I’ve known for quite a number of years now: that conventional smartphones are not fair.

Once more the links to the costs’ breakdowns:
FP1:
https://www.fairphone.com/wp-content/uploads/2014/09/Fairphone_Cost_Breakdown_and_Key_Sept2013.pdf
FP2:


#20

As far as I understand, there are two major differences between the FP1 and FP2. These differences will add up for most of this 130€, I guess:

  1. The FP2 is a better phone. Simply put, it has better components (because these should last longer). Better components cost more money.
  2. the FP2 was designed from scratch by Fairphone. So you have to include design/engineering costs. These cost have to be spread out over a relatively small amount of phones.

I also assume the fairtrade gold will be more expensive, but I don’t know if they adapted the cost breakdown after the inclusion of this new material stream?