On Monday, the Trump Organisation announced a new business venture – Trump Mobile.
US President Donald Trump’s sons, Eric and Donald Trump Jr, unveiled the mobile and cellphone service at Trump Tower.
The Trump Organisation has claimed that the mobile, known as the T1, will be sold for $499 (Rs 42,000).
The firm has also claimed that the mobile will be “designed and built in the United States”.
But is this possible?
Let’s take a closer look.
The smartphone industry in America
First, let’s briefly examine the smartphone industry in the United States.
The industry is one of the most competitive and difficult to break into.
Two behemoths, Apple and Samsung, loom large over the market in the United States.
However, these two companies sell most of these phones from China, South Korea, India, and Vietnam.
Just one company – Purism in California – makes phones in the US.
It’s a ‘Liberty phone’ and costs $1,999 (Rs 2 lakh).
Though its chassis is made in China, all its other components – including the Operating System – are manufactured and assembled in the United States.
What do we know about the phone?
The Trump Organisation has already announced that the phone will run on an Android operating system.
It has also announced a slew of features for the phone, including a 6.8-inch AMOLED screen, a 16-megapixel selfie camera, a 50-megapixel main camera, 12 gigabytes of RAM, and 256 gigabytes of internal storage.
However, some important points must be kept in mind.
First, it must be noted that this is a licensing deal, like many other Trump-branded ventures.
This means that those who run Trump Mobile are paying to use Trump’s brand—essentially his name and likeness.
The phone’s website already states that the Trump Organisation is not involved in designing and manufacturing it.
“Trump Mobile, its products and services are not designed, developed, manufactured, distributed or sold by The Trump Organisation or any of their respective affiliates or principals,” a disclaimer on the website reads.
Experts are skeptical about whether this can be done.
“There is no way the phone was designed from scratch, and there is no way it is going to be assembled in the US or completely manufactured in the US,” Francisco Jeronimo, vice president at International Data Corporation, told CNBC Tuesday. “That is completely impossible.”
“They don’t even have a working prototype. It’s extremely unlikely,” added professor Tinglong Dai, who teaches operations management at Johns Hopkins’ Carey Business School.
“You would have to have a miracle. You would need to have economies of scale. You would need a sustainable demand for this product,” Dai added.
“If the Trump Phone promises a $499 price tag with domestic manufacturing, this announcement looks classic vapourware,” said Purism CEO Todd Weaver.
They say that the US does not have the manufacturing capacity to do so.
They add that the phone will likely be assembled in the US, with parts imported from abroad.
Apple’s basic phone, for example, costs $1,199 (Rs 1 lakh).
