If you compare the FP3 with an similar phone which has nearly the same facilities, then you will find nearly one phone that matches this criteria. That is what I’ve done the last days. My requirements for a new phone are:
Bluetooth 5
NFC
Gorilla Glass
double SIM card plus SD-card, without shared slot (which means that there are only 2 slots, one for a SIM and the second for another SIM or SD-card)
navigation possible with Galilleo satellites
if possible I want to be “master user” (root) to install a firewall, x-privacy, …
If you take these few point as a “must have” for a phone I found only one which meets this criteria but since few days I know that there’s a second one, the FP3. The other one was the Motorola Moto G7 Plus which costs something between 250 and 300 Euros. So my decision is now made to order the FP3 which has additionally 5 years of support.
To answer your original question, why did I spend € 450,- on a phone with the same specs as a cheaper phone? In matter of fact, I never made a calculation like that. Privacy/security is a major issue for me and after running several phones that were way more expensive than a fairphone, worse in hardware, locked-down/closed source and that got unsupported after 2 years, I was delighted to get a fairphone 2 with fairphone open OS. I can take the security in my own hands and it still stays supported. The investment of securing the phone myself on top of the purchase of the phone has paid itself back hands down.
And still: I am willing to pay 50% more for fairtrade and ecological clothing, I find green electricity and hosting more important then the price. So why not pay a bit more for a sustainable phone?
So the whole discussion about the price/performance ratio of a fairphone is not that interesting for me. The phone has advantages that are way more important for me.
I think that is the wrong question. The correct question is: Why are other phones so cheap.
The answer to those questions: Because resources and parts are produced by underpaid (understatement) people and abuse of child labor.
Sometimes the cheapest ‘deal’ is not the best deal, even if the deal (for you) is economically better.
True, but how would we communicate such to the consumer? When the consumer goes to the store to buy a chocolate bar, they see the fairtrade logo clearly, and there were commercials made for the bars. Word of mouth also worked with them. How would you translate such to the Fairphone?
Well, I would say first of all everything about the Fairphone needs to be decent enough. The camera on the FP2 on release wasn’t. This is not only a solved issue; the camera is actually quite good now, on par with the famous Pixel 3a camera.
Tbh, I don’t think that’s a major part of it. I’m pretty sure the biggest reason why some companies produce their products cheaper than others is mass production.
If Fairphone would sell their phones in iPhone numbers they could make the devices cheaper, pay the workers more, invest more in their impact programs and probably have enough money left to upscale their software team, hire @chrmhoffmann, @z3ntu, @mal and others and officially support 10 different operating systems.
But do you really think, that mass production is really done at that much lower costs, just because it’s made amass?
Mass-production is no magic-wand, that is reducing costs by 50%. The thing you can safe money on are the fixed costs (i.e. e.g. programming the machines, that produce the pcb, that solder the parts etc.).
Labour costs etc. will rise with every new part you make, as will costs for raw materials. When producing a phone, I would not expect the fixed costs to be so high, that they make up 50% of the price of a FP.
Much of the lower prices for mass production are due to the fact, that big even giant companies like Apple or Samsung have the power and use it to press small companies until they squeak (so to speak).
Example from Germany: Aldi (a global super-market chain)
They were negotiating about 0.1 Eurocent with manufacturers and demanded total compliance.
E.g. they offered some farmer producing eggs a major deal, that guaranteed him to sell vast amounts of eggs at a certain price. Therefore he invested in producing more eggs and he terminated other contracts he had, because he could not produce enough to fulfill all contracts. So his business grew by 100% and he sold 70% of all his eggs to Aldi.
Two years down the line another farmer offered the eggs at 0.1 cent less; so Aldi terminated the deal with Farmer 1.
Farmer 1 then went bancrupt, because he had loans, lots of fixed costs, an overproduction and no other customers to sell his eggs to.
And that’s the same - in my opinion - all over the world.
If Samsung, Apple or H&M come along and offer a company / factory a very good deal, they will do everything to get it. That’s, why cocoa beans are collected by child slaves in Africa, why tees are sewn by “slaves” in asia and why constructions are build by subcontractors employing illegal aliens at low wages.
Another example right around the corner: Workers from eastern Europe in meat-factories in Germany get 900 Euro netto, and have to pay 150,- Euros of that money for a place in a 5-bed room. They are employed by subcontractors, who are responsible for tax and social security. Those subcontractors are paid e.g. way less than 2 Euros for cutting up a whole pig.
Besides the fact, that I don’t eat meat and never could work in such a place, the cheap meat is not just available because of treating the animals badly that you eat, but also the humans that work in those factories.
When you reach a certain amount producing even more will probably not significantly drop the production cost for each device any more, but I’m sure Fairphone is still far from that point.
And those are a lot. For each product you produce you first have to design it, then get certificates and port software for it and then maintain it.
Even those running expenses will drop relatively if you produce more. That’s how the economy works. If you order more raw materials you’ll get them cheaper, if you order more components you’ll get them cheaper, if you order more final products the factory will produce them cheaper - per piece.
I don’t know where you are taking the 50% from. All I said is that mass production vs. low quantity production makes a bigger difference than fair production vs. exploitative production.
That is true. That’s an unfair advantage they are making for themselves, but even if you’re not a company that uses their power for evil, producing more will give you better negotiation power with your partners.
I’ll quote an earlier post from myself here where I wrote about a talk by Tina Trinks (former FP employee) gave in Vienna. I took notes and made that post shortly after the speech, so I think back then I remembered most of the important talking points correctly:
According to the cost breakdown more than 10% of the product cost is royalties for licenses and patents.
Also almost all of the €33.19 “Investments” seem to be fixed costs.
But let’s see if a cost breakdown will come out for the FP3 and if that will shed some light on this question. Until then let’s just agree that both mass production and exploitation make products cheaper and that they usually come together.
True, that’s how economy works. One point being, that for suppliers the fixed cost factor is the same. But - given the numbers of Samsung etc. phones - another (I guess more important) point is that much lower prices for higher quantities are in the end paid for by the workers. At least I have never heard, that a company has paid lower interest rates to shareholders for increasing production, while I have heard, that wages were not increased or new employees were paid less, even though production was going up?
I take that from the phones that are comparable to FP3 by the specs costing around 200,- Euro instead of 450,- and I am being generous with that margin, giving the difference in prices.
True.
Here is the cost-breakdown for FP2. 230 of 340 Euros for the product are costs for materials, while 39 Euros is for patents an IP holders.
33.19 Euros is external investment and internal resources, as you said. Take that off the phone price of initially 525 Euros and you are nowhere near the price of a Samsung (and those company even makes lots of profit off those phones).
And with 100,000 sold phones 1 million investment equals 10 Euro per phone. Sure, that drops to 1 Euro for a million phones.
As I perceive it, most (for sure not all) of the higher price is due to the higer costs for fairer production.
And I just hope, that Fairphone would not use a higer market share to make tougher contracts for their suppliers. As soon as that happens they are no longer fair.
Edit:
But I really would like to know, what could be saved off the price, if the could produce more phones.
My guess would be, that the FP3 already has been produced on a business plan, that is based on higher sales numbers. Therefore the lower price compared to the FP2.
As I work for a very big industrial company in the electronics production in Germany I can tell you that there is always room for improvement. Nearly everything could be produced in an automated factory, the only question is, when it makes sense. As soon as production numbers raise, the calculation starts what invest in machines will gain a return and when. This carousel always turns and never stops.
And this is nothing special. We all thinking in the same manner. If you need to handle some boring work with recurring working steps it is likely that you block your workings steps to get the work done faster. This is the first step of automation. The big players just bring it to perfection. And that saves a lot of money.
While you are absolutely right for sure, I have my reservations, that this factor is of real importance in this (the Fairphone) case.
Automation, i.e. replacing workforce with robots, saves lots of money when producing lots of devices. Therfore mass production really has the potential to be way cheaper (but costing jobs of course).
In the case of Fairphone on the other hand, the phones are produced in already highly automated factories, where other devices are produced as well.
I really can’t imagine, that the production of a FP2 or FP3 involves more manual work than the production of any Samsung or Apple Smartphone.
The cost breakdown for the FP2 shows, that labor (including a workers welfare fund) came at 12.11 Euro, while line and equipment at the factory cost 15.60 Euro, general administrative and handling 9.50 Euro and handling and configuration 4.00 Euro.
I guess, that does not leave too much room for money saving by automation.
I would also reason, that an only economic perspective will not really lead to complete view and an answer for you.
The fairphone is more expensive as it complies with a lot of sustainability, fair trade and social values other telephones don’t. Therefore it comes with a higer (more realistic) cost. Therefore for me it has this meta-perspective that the 450 € is the price of a sustainable, medium high tech, highly repairable phone, which also shows other people and telephone manufacturers that the production of such a phone is at least possible (not having a price of 2000 € or higher).
And for sure it is a totally personal choice if you want to afford or if your personal situation allows you to afford the fairphone. What I would like to try is to split this reasoning and keep it serparated.
So in case your personal situation gives the economic perspective the highest rank, don’t go for the fairphone. Having a used phone and getting this repaired is a really good and highly valued option.
In case you are able and willing to support the cause of this sustainable alternative, please go for the fairphone.
But social values here are often neglected. Savings by any means are often the central matter. Miele actually thinks different here. Social values seems to be considered here. (in case someone gets his fingers on the [german] report -> Familiendynastien Miele)
Automation is done where it makes sense but not by any means, let alone longevity - for which the name Miele almost stands as a synonym.
This is the reason why I buy Miele products.
My company take their social responsibility in similar ways, fortunately. And do not automate at any (social) costs.
And one should never forget, that not everyone is cut out for complicated work demanding intellectual skills. If we do automat all that work, what are they supposed to do?
In my humble opinion, our society is measuring the worth of one’s labor way to much by the education/brain/intellect; 'cause where would we end up, if no one would be doing all the hard bodily work?
That’s right. And I don’t get why such work is being looked down upon most of the times … I keep saying the worth of somebody’s work can be measured by the impact of when this work isn’t done for a few days or weeks. According to the well-known old joke … Who are you going to miss first - middle management or the cleaners ?
Probably on Mars…hm, what made me get to this thought…
@AnotherElk
Hm, are you sure this was a joke? Maybe I did not get it…
Unfortunately I do see quite some analogy to true life…hence I did not fully crack up on laughing…
Do you have another? Now I’m in the mood for more…
Well, if your cool with people in the RDC being robbed and murdered and people in China being treated like slaves by all means buy a phone for less than the FP.
Na, highend ist das nicht gerade. Beim FP2 habe ich mich von Anfang an darüber geärgert, dass es technisch USB3 schaffen würde, aber keine C-Buchse hat. Und Langlebigkeit bezweifele ich mittlerweile sehr, nach den Erfahrungen mit den Vorgängermodellen. Mir ist faire Produktion auch sehr wichtig, aber ich habe den Eindruck, dass es vielleicht besser wäre, mehr Energie in das Produkt zu stecken, um es besser marktfähig zu machen und mehr Absatz zu haben, und damit auch bessere Möglichkeiten zu haben auf die Produktion einzuwirken. Und das Format des 3er gibt mir den Rest!! Nach Apple schielen und noch größer??? Und es wäre auch nett gewesen, mal die treuen Fans zu fragen, anstatt sie mit blöden Infos zuzuschütten. Ich bin schwer enttäuscht.
?
Maybe I did not get it…
