Explaining the Smartphone - Just why are they so expensive?

I was showing an interested colleague my Nexus One the other day, and the inevitable question came up - how much was it? The £400(ish) response got the usual sharp intake of breath, and there's me trying to explain, as ever, "but it's not just a phone, you know". That always seems such a hollow line!

It got me wondering why it is that people are so shocked by the price - I think it's the fact that they really don't get just what a modern phone like the Nexus can do ...

I've been an avid smartphone for user for many years now, and for me the core has always been to have access to things like my contacts, emails, calendar, music, pictures, etc. wherever I go. But these days the phone is pretty much a whole host of other gadgets as well, and the rise of the various app stores is adding scores of other new tools every day. But enough of words, I thought it might be best to show just how comprehensive something like the Nexus is with a table showing how much you'd have to spend on other gadgets just to be able to access some of what it can do.

Nexus One Smartphone Functions versus Gadgets
Nexus One Smartphone Functionality Equivalent Gadget Cost
Satellite Navigaiton Tomtom or Copilot
£100
Music Player & Video Player Microsoft Zune, iPod or Archos MP3
£100
Mobile Gaming Platform Nintendo DS
£150
Digitial Camera (including Video) Low end 5MP camera
£50
Digital Compass Standard entry level compass
£10
TOTAL
£410

So by my (very rough) calculations you've already got £410 pounds worth of gadgets in your pocket before you consider that it's actually a phone as well. Not to mention a powerful miniature computer, able to browse the web, check your emails, manage your appointments, and do a whole host of other functions that your average desktop computer can do. I guess most people just don't realise that - but by the look of some of the latest statistic for smartphone uptake, they're just beginning to find out.

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