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


  1. You can pick up one of those no-contract CracFone dealies at like walmart or 7-11 for ten bucks here in the states. I can’t vouch for the user experience but they look slightly less like a piece of shit than this green thinger.

    1. Tracfones only work on their network, so they subsidize the purchase price on the assumption that you’re going to be buying airtime from them.  Even if you don’t use all your minutes, there’s a minimum charge for a certain number of service days, so the model is still the same as for phones with a plan.  This one, you can put in a sim card and run it on any network, so nobody’s subsidizing it.

  2. Incidentally, that OLED screen looks exactly the same(especially the ‘yellow at the top, blue elsewhere’ and, as best I can tell, the resolution) as that found in Sandisk’s “Sansa Clip” and “Sansa Clip+”.

    I don’t know who is driving the volume on these things, Sandisk could very well have picked them because somebody else was making them cheap; but that particular color combination on the screen appears to have been chosen based on market volume…

  3. This is why, when you buy one of those fancy cameras with the internet access and touch screen they throw in a cell phone for free.

  4. Another possible reason for this “miracle” (as Bunnie calls it): dump your industrial pollution straight into rivers and the atmosphere.

    Granted, that Atlantic Monthly article is 15 years old, but has anything changed much in the meantime?

    1.  Destroying the air and water is fine by me, that all happens somewhere else. My water and air aren’t connected to China’s. All I really care about is getting cheap electronic gadgets and stuff because my manufacturing job was sent to China because of the stupid government EPA regulations! Now I’m working at a minimum wage job at a place that sells cheap electronic gadgets over the internet. We pack them up and ship them to people in other parts of the country where the stupid people demanded a living wage.

      1. my classmate’s step-mother makes $83 an hour on the computer. She has been without a job for 5 months but last month her payment was $15937 just working on the computer for a few hours. Read more on  Jive8.c­om

    2. I don’t doubt that ghastly environmental practices, tantalum sourced directly from child-slavery mudpits in Africa, and who knows what else contribute.

      However, given that the same things are true of $50, $100, $600, and up devices, it’s still worth asking “How exactly did they hit $12?”

  5. This sounds like a traveler’s dream: a cheap phone you won’t miss and you can just get any sim for it.. why won’t he broker it damn it!?

    1. Looks like their ilk can be had for less than $30 shipped from DealExtreme, not quite the same bargain, but pretty cheap, e.g.

  6. That’s an impressive price point for a 4 layer board with two big chips, a battery, a display, a keyboard PCB, and a handful of connectors in a plastic case with separate keyboard key piece.  And some hand soldering assembly effort in addition to the machine soldering required by the big chips.

    I’d guess that the most important part of achieving the price point is finding the absolute best deals on the parts, which may mean doing a new PC board design for each production run as the lowest-cost available components change over time. Heck, the battery doesn’t fit the board!

  7. This is actually really interesting,as i owned one of the very first MP3 capable phones

    Was also one of the very first java phones.

    I remember trying to work websites over this cutting edge java midlet browser running over a mobile dial-up link…

    Was so slow, but it worked, unlike 99%+ of other phones on the market at the time  could not manage :)

  8. There is an ecosystem for cheap no-frills phones. For example, the Nokia 100. I bought one new in Phnom Penh for US$18 and use it when traveling.
    These devices are for people who live on a dollar or two a day. When a farmer in a rural area can receive spot-prices on commodities, this is far more important than some Twit-feed on what Rapper X had for breakfast.
    This is simply…one of those.

  9. Why is it that it costs as much as $12 ?

    Digital watches used to be hundreds of dollars; now, the plastic costs as much as the electronics.  Calculators used to cost hundreds to thousands of dollars, now (if you can find them) they’re practically free.

    The additional functionality here over a calculator is a bigger battery, a better display, and a bunch of shit in silicon.  Which, as soon as you have nearly free IP libraries for it, can be fabbed pretty cheaply on scale for the number of transistors you need for a cellphone.

    1. Compared to a watch, it’s 20 times as big in terms of raw materials. The battery is bigger, the silicon is bigger, and the display is bigger. Bigger PC board, more connectors, etc.

      1. I actually know all that; Digi-Key, parts bought on tape reels, pricing out ASIC production, and having hard and soft molds machines for plastic parts have been things I’ve had involvement in at work before, though I don’t do it all the time.

        The point is – We (mostly) grew up in an era where the components for cellphones were premium components.  They aren’t anymore; it’s commodity.  That does not mean free – you still pay more for the larger cell battery than for a calculator, and larger display, and for the silicon area used (and the fact that you will need more I/O pads).

  10. You can get a perfectly good pay as you go mobile in the UK for £9.99, less than USD20.  Subsidised by the network of course but much better build quality (Samsung E1230, E1190, etc.).   So the price depends very much on the market.

    1. Quite. I’m struggling to see what the story is here when I can find pretty much the same thing in Tescos.

      Meanwhile, what is it about CleverPhones that make them an order of magnitude more expensive?

      1. Surely the point is that the £9.99 phone from Tesco is suibsidised by a mobile network. The $12 dollar phone from the Shenzhen mall is not subsidised by a Chinese phone network, and the production cost must be even lower than $12 because the price Bunnie Huang paid for it includes the manufacturer’s profit and the retailer’s profit.

  11. As an example of something a bit more advanced, I recently bought an IPad clone for about $90. It’s obviously not got the same specs as the leading brands, but it’s not bad either (8″ screen, 8Gb hard drive, 1.5 GHz processor, Android 4.0, 1024 x 768 resolution, WIFI, external 3G and ethernet capability…). It has a front facing camera and has no problem with Skype. The internet’s pretty fast and it has full access to Google Play (which is usually not available in China). So far, apart from taking a long time to start up, I’ve had no trouble doing anything I wanted to do. It’s still less than a month since I bought it, so I guess there’s still plenty of room for things to go wrong with it. However, so far it hasn’t shown any indication of problems. Incidentally, Onda is a recognized company here, they were selling no name brand versions for just over half the price (with single core processors rather than dual core).

  12. My parents bought a 9.99$ phone in Florida when they were on vacation, so they didn’t have to use their own (Canadian) and pay the exorbitant roaming fees. Apparently it also came with a charger, a case, and something else.

    It worked by calling another number first, and then entering the number you wish to call. It wouldn’t surprise me if this worked by all calling the same switchboard which then routed the call through a VOIP connection over the internet, to make the actual call.

    The thing was worse than useless. It dropped multiple times for every call, and even when connected, there was A) a time lag to every conversation, it was like talking to someone on the moon, and B) it was scratching and difficult to understand to the extreme. In the end, they just used a local land line and payed the fee.

    Maybe good for kids who want to pretend they are explorers on the edge of space trying to make last contact with earth before entering the vast unknown…

  13. It’s interesting to keep in mind that even at $12, the cost can be substantial to someone in Shenzhen. (That $12 is a few weeks of public transport costs).

    1. $12 is also more than a week of public transportation in a bunch of large high-income Western cities (if you have an annual pass).

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