The Titanium Smartphone That's Really A Veblen Good

Posted: Dec 21 2013, 6:36am CST | by , in News



I thought that this new titanium cased Android smartphone was an interesting little study in consumerism. For the real point and purpose of this phone, from Gresso, is not to be a smartphone at all, but to be a Veblen Good. Technically it’s a fairly unimpressive phone if we are to be honest:

Not too shabby, but the downside is that they don’t necessarily come with the flagship specs you might come to expect from phones that cost a third of the price: The 219g (7.73-ounce) Radicals come with Android 4.1.2, a 4.5-inch qHD screen, dual SIM support, an 8MP rear camera, 36GB internal storage and a quad-core 1.2GHz processor.

That’s not exactly a high end spec in this day and age. However, the price tag of $1,800 is most certainly high end. So what’s the great attraction of the phone?

The bottom-line model, the Radical R1, goes for $1,800 and is made of grade 5 solid titanium,

Well, OK, grade 5 Ti isn’t actually solid titanium, it’s actually 6-4 titanium in the slang, or 6% aluminium, 4% vanadium. It’s the standard aerospace titanium and it’s not actually all that expensive. You could probably find it at $10-$15 a kg if you really looked. Not the easiest thing in the world to work but again, that’s not what has really contributed to the cost. What has really contributed to the cost is that this is a Veblen Good: something specifically designed to be costly so that the people who have one can show off that they are rich enough to be able to afford one.

Gresso aren’t the only people who design such phones: there’s a number of companies that do this. But do note that it is always the case that is the expensive part of such phones. They’re absolutely not competing on the expense or utility of the internal parts of the phone: there’s no point in that given their strategy. They are instead competing to produce something that signals wealth: thus it will always be external characteristics of the phones that are worked upon.

As to why companies work in this area well, if the whole point of what you’re making is that it has to signal being expensive then of course it’s possible to build very healthy profit margins into the product.

Source: Forbes

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