How is a $12 phone possible?

Bunnie Huang paid a visit to Shenzhen's Mingtong Digital Mall and found a $12 mobile phone, with Bluetooth, an MP3 player, an OLED display and quad-band GSM. For $12.

Bunnie's teardown shows a little bit about how this $12 piece of electronics can possibly be profitable, but far more tantalizing are his notes about Gongkai, "a network of ideas, spread peer-to-peer, with certain rules to enforce sharing and to prevent leeching." It's the Pearl River Delta's answer to the open source hardware movement, and Bunnie promises to write more about it soon.

How is this possible? I don’t have the answers, but it’s something I’m trying to learn. A teardown yields a few hints.

First, there are no screws. The whole case snaps together.

Also, there are (almost) no connectors on the inside. Everything from the display to the battery is soldered directly to the board; for shipping and storage, you get to flip a switch to hard-disconnect the battery. And, as best as I can tell, the battery also has no secondary protection circuit.

The Bluetooth antenna is nothing more than a small length of wire, seen on the lower left below.

Still, the phone features accoutrements such as a back-lit keypad and decorative lights around the edge.

The electronics consists of just two major ICs: the Mediatek MT6250DA, and a Vanchip VC5276. Of course, with price competition like this, Western firms are suing to protect ground: Vanchip is in a bit of a legal tussle with RF Micro, and Mediatek has also been subject to a few lawsuits of its own.

The MT6250 is rumored to sell in volume for under $2. I was able to anecdotally confirm the price by buying a couple of pieces on cut-tape from a retail broker for about $2.10 each. [No, I will not broker these chips or this phone for you...]

The $12 Gongkai Phone