How can FairPhone get competitive on pricing compared to non FairPhones

Discuss The Industry
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FairPhone 3+ is £399 on FairPhone store
Xiaomi RedMi 9 is £99 on Amazon Amazon.co.uk

Both have 4GB RAM / 64 GB RAM / Android 10 there are some differences spec-wise but overall they are pretty similar spec.

I have a FairPhone on its way at the moment which im very happy and I know the answer really is buy with your conscience and decide whats important to you.

However, after seeing the RedMi at this price today I think its startling how large the price disparity is between the two.

It got me remembering about this article by the wired The Fairphone 3 actually has 2019 smartphone specs | WIRED UK in which they dubbed the FairPhone 3 having hit a milestone hitting the “under £200 ethical premium” compared to the just released similar spec Moto G7 at the time.

It seems now from the Redmi 9 vs the FairPhone 3+ you are paying 4X.

Now obviously I have cherry picked data to make a point, but I would really like to gain some insight into the price differences.

A simplified way to look at it could be that FairPhone pay workers 4 x the amount as the other non ethical phone companies do, but im sure the premium isn’t that high and it would be foolish to think it was as single pointed as this and also there are economies of scale to think about which FairPhone being a smaller company and Xiaomi being massive now. Also there’s the fact that FairPhone are only taking a 1% profit out of this compared to Xiaomi who are obviously just out to make their shareholders money as the main priority.

Is there some sort of comparison of say, if FairPhone were to make the FairPhone 3+ the standard non ethical way in terms of materials and labour would it really turn out sub £100?

I have read the FairPhone impact reports so im aware of the approximate breakdown of previous FairPhones in terms of costs.

A costs estimate I have thrown together in 5 minutes as a ballpark (non going to be accurate as no one really has all the info here)

FairPhone 3+ £399

Materials £125
Labour £125
R & D £40
Marketing £60
Misc £40
Profit £10

RedMi 9 £99

Materials £20
Labour £20
R & D £20
Marketing £20
Misc £10
Profit £10

So my question is, do FairPhone address this with any articles or videos on their site or socials.

Also how to FairPhone plan to remain competitive, especially with the prices of non ethical phones dropping all the time, does FairPhone have a public roadmap for the future.

Thank you for reading my post, hopefully it doesn’t come across that im anti FairPhone, rather im wanting FairPhone to grow and become accessible to more and more people with limited budgets whilst upholding working conditions in the supply chains.

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You will find a gross cost-breakdown for the FP3 on this page:

41% of 450 € are production costs
and just 1% is profit.

And you find much more information on the Fairphone blog.
E.g. searching for “cost breakdown”:

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Like Bert said, as things are there’s a very narrow profit margin - the company has been partially living off subsidies and grants for years.

The way for FP to become competitive in the way you specify is for other phones to become more expensive - right now the problem isn’t that Fairphones are too expensive, the problem is that other phones are too cheap. If you buy an unfair phone, you’re paying a company that steals wages from its workers to get the final product cheaper than should be humanly possible.

Robbing a drugstore is a very cheap way of getting money, but it isn’t fair; companies like Apple and Samsung do a whole lot worse than robbing drugstores, every day.

FP make an effort not to steal from their workers, and as such the higher price is in some sense an integral part of the final product. A higher price means that the workers who made your phone are getting what is due them, and cutting prices would not be fair.

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Hi Briefly I’m not sure they can be competetive. Noting the problems they have with software it appears thyey cannot afford enough initial staff to respond in a timely manner, weeks may be the case and the response if often lane, add to that I can’t see efficient software developers in Taiwan or wherever that I think the phone needs more funding to make it a properly working product.

I would pay twice the price if it was a fully functioning phone with no audio and charging issues etc.

I love the fact that people care enough to go out on a limb to show their true colours by entering a consumer market in what they consider to be a more ethical way.

So although I am not that happy with the product I am in the process of buying some shares in FP too to support the notion, ethics are not cheap if you want to consumer.

So yes everyone would like a Fairly Traded products at low prices but it’s exactly the desire for low prices that has created this consumer throw away society. Who needs to repair a product when it’s cheaper to buy a replacement ~ the common mentality of consumers. :frowning:

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I work and want to earn enough money to live on it without breaking myself. I would also like to grant the same right to those who build things for me.

In families where the father or mother assembles the phones for Xiaomi 16 hours a day or digs the raw materials in mines, the young children still have to go to work after school so that there is enough food.

FP is not expensive.

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To add fuel to the fire here are a couple of consumer products that I’ve recently had to deal with.

  1. I wanted some stainless steel mesh to protect strawberries. The option was for a 30m x 1.2m roll at £270 or one at £1700, the first from China the second from Germany ~ I decided the mice and birds could have the strawberries.

  2. I wanted some underpants options are as follows:
    Matalan ~ 5 for £15 (£3)
    John Lewis 3 for £23 (£7.67) Organic made in China
    BlueBuck 1 for £24 ~ Organic made in Portugal/Austria

I bought the Bluebuck

Whatever your ethics someone pays.

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:100:
And thanks for mentioning BlueBuck. I haven’t heard of them before; so I add this link, since I guess it’s in line with this forum. (We even have some thread/wiki about such stuff here. I will try to locate it and add that brand if it isn’t already there. Edit: Done!)
For boxer-shorts (€ 24.95)you could consider brainshirt.eu as well. They are producing organic fashion in Central-Europe as well.
(Though sending to the UK - i.e. outside EU - comes at a hefty price of € 25, while EU is €12.50 and Germany € 5.90)

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OK That’s a bit of a shocker. I have a daughter in the Fairtrade clothing industry I’ll have to send her those figures. Just have to laugh it’s so stupid :roll_eyes:

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Not at all.

This is the question of all questions. What future holds for fairphone. What is fairphone? A player or a template for the very near future? Because right now it has relatively no impact. It is a B certified corp company, the number of which is growing.

The world is changing, climate change is a bigger issue than it ever was, as well as human rights which are made up and do not exist, a human right to a fair pay is a very grey area.

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And please remember one thing: Someone is always paying the real price.

If something is cheaper than you can reasonably expect, then it might be the worker who produced it with a ridiculously low salary, or his/her family having to live under circumstances most of us could not even imagine or nature which got destroyed because ressources needed to be harvested in the cheapest possible way or the children who had to help on the big landowner’s farm or the indigenous people who got expelled or or or or.

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Honestly, there are only 2 ways Fairphone can become more competitive pricing-wise:

  1. Start mistreating its workers and hang up suicide nets instead of paying fair wages
  2. Governments severely punishing the worker exploitation of the unethical companies

So yeah, I’m voting for #2 :slight_smile:

Luckily @BertG already posted the cost breakdown, explaining it very well!

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I would love for that to happen but it will not happen, history shows that exploitation is an invaluable resource. Our society was built on the backs and bones of slaves and slaves with privileges. A radical paradigm will make all that we hold for granted to implode. So I will vote for:
3. Aggressive ingenuity

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One thing that you may underestimate here is the lower cost-per-year of a Fairphone versus its competitors making it a more compelling choice than it seems at first glance. I can’t talk about the RedMi example given, because I haven’t owned it. I still own a Fairphone 2, new bought for ~£525 (I think), plus a handful of batteries and a bottom module. This means I had ~5 years of phone already for (rough estimate) £650, or £130 per year. The FP3 has a bigger battery, meaning it’ll last longer, and is cheaper to begin with. With the same amount of perseverance (replacing worn parts), there’s a good chance you can get 5 years of life out of it for £500-550, or £100-110/year.

When you make this comparison, try and ask yourself how long both phones will last (you). Fairphone is easily repairable, and gives software updates for longer, making it a phone that can last you a whole lot longer. Factoring that in, the FP can suddenly be “only” twice as expensive rather than 4x (… as long as it doesn’t accidentally take a dive in the Oude Gracht or goes skydiving without a parachute of course :-D)

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This is mainly about economies of scale. Fairphone would have to sell way more phones to become more price-competitive. Is this ever going to happen? I doubt it.

Best wishes,
Thomas

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The good thing is that the number of FP3 sold until autumn 2020 was equal or even higher than the number of FP2 sold in 5 years.

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I guess they still have to be recognized in the market by the average user.
Though this is no easy task, they seem to be on a good way already.
Things like the video on youtube doing the durability test (see this thread) on a channel with more than 6.6 million subscribers are a big step in the right direction.
And such things are paving the path to the American market as well. I guess for the break-through they have to get recognized there. And they really should cross the Atlantic Ocean with a troublefree phone-model and a refined support infrastructure only. Therefore it’s a good thing in my opinion, they are focussion on Europe right now and gain visibility.

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I see your point @techuser3000 and it is hard to explain to many people why you pay four times the price for the hardware.
Let´s use another example for an explain:

It started in the mid 2000s when very small car manufacturer joining the marked with a very uncompetitive car which has limited range, space, comfort and reliability compared to all others. Only very enthusiastic people considered buying such a car.
Only one thing makes it unique, it is powered by electricity.
Now we have 2021 and this company claimed to be the moste valuable car company in the world.
What happened? The company at that time was confident that electic cars will be more desired in the future then petrol cars. This is what pays out for the company now.

To transform that to the cell phone market: Will there be a larger amount of customers now and later on who consider to buy a product with a unique (social) feature?
What do you think what will be the future?

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There is hope. And as Fairphone streamlines its own production, it will definitely gets more and more competitive, even if slowly, and it is way ahead compared to others in terms of fairness. I do not know what is the plan with the FP3 or FP4, but I feel like it can only get fairer, better and cheaper. And therefore convince more and more people. People also gets more and more aware of the downsides of this industry.

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Fairphone does not have direct competitors so it cannot lose to anyone, like for example Nokia did, or Siemens. But its market share is also nonexistent, but is slowly growing, not that it will grow into a tech giant like samsung, but like I said before, the company exists as a practice template for the near future companies. Question is, is ethical industry a reality or a utopia, time will tell…

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The issue on ethics could have its own topic but that would go to thousands of post, so I’m OK with the issue being, so called ‘off topic’ a bit as it’s a never ending discussion that underpins everything we do in our world of exploration which is inevitably exploitation.

The question is the term ethics. Ethics are numerous and tend to encompass certain groups of individuals that predominantly focus on their continued existence within a larger group, like the human species in this biosphere, or the creation of another on Mars.

So an ethical industry can grow in reality but not be all encompassing as it will forever compete over resources.

Given that no one has control over their own consumption and that most try to control others through physical force or ethical arguments ~ and that cows and trees have just about zero say ~ then yes utopia.

And given the distance form here to utopia is often seen as a time differential then that equates to never.

However the basis of ethics is not just the need to survive with some concern for the future consequences but that as an individual I want to remind myself that I actually want to care as a developing consciousness.

Here personal ethics is an acknowledgment of morality, and my ethics are just arguments to help me wean myself from consumption, as one day it will all just drop away.

So whilst we play together why not play the game of ethics.