Android logoWDS, a wireless services company specialized in tech support, has concluded that the proliferation of cheap ($100, no contract) android phones may cost wireless carriers $1.99B worldwide. WDS says that this is much higher than more expensive handsets that can be worth $500-$700 (no contract). Do you find that surprising? I don’t. There’s no way  a $100 phone can be as good as one that costs 6x more, and in the end, the wireless providers bear the cost: usually, they are relatively eager to replace a broken phone.And you can bet that they’ve done the math. Even cheap phones often come with a relatively expensive data plan, so in the end, they do make money. In fact one could even argue that carriers *need* those cheap phones to spur adoption.

Of course, for Android, this is manna coming from heaven: to build the cheapest phone, you need an seemingly free operating system (it’s free if you don’t get sued by Microsoft or Apple), and from there it’s all about choosing the cheapest components that will get the job done. This accounts for a large portion of Android’s ever-growing market share. Now, is this going to give Android a bad rep? Probably not, at least not more than Windows got a bad rep because of super-cheap unreliable laptops.

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