Jared Brenner, Senior Counsel at Stubbs Alderton & Markiles, recently discussed feature phones in the San Fernando Valley Business Journal, focusing on their “scalability and the recurrence of revenue.” In recent years, several feature phone companies have merged, driven by the addictive nature of social media and other distracting apps. Founders have identified a gap in the market for “dumber” smartphones, which allow access to essential apps like online banking without the distractions of time-consuming applications.
“I could imagine feature phones becoming more profitable if there is a way to generate recurring revenue from the hardware, like a smaller-scale version of the installment payment plans Apple introduced to the market years ago,” Jared noted.
He also pointed out, “However, venture capital funds generally rely on outsized returns and mass adoption of software, and their needs seem incongruous with the concept of a dumbphone.”
In closing, he stated, “The average smartphone user is an exponentially more profitable customer for a venture-backed software business because it’s almost impossible to generate advertising impressions or collect usable behavioral data from a feature phone.”
