A Study in Capitalism: Kaios & Feature Phones

Many people in the United States don't know what KaiOS is or does. KaiOS is a company based in California (no surprise). They make the operating system used in inexpensive flip mobile phones for developing countries in all continents (except Antarctica) with long battery charge (about 5 days on stand-by). This means that the hardware needed to run KaiOS (the operating system) and the browser-based applications doesn't cost much to produce allowing millions of customers to spend as little as $20 for a phone with 320x240 screen (not a touch screen) that can browse the internet, take photos and video, get the weather, play games, take notes, engage in social media (for example, Twitter), get the weather forecast, read the news, and chat with friends and family via Facebook's WhatsApp. Since mobile mobile phones have a built-in FM receiver, most of these mobile phones also offer FM radio when using wired headphones to listen to music or the news.

Although the latter sounds like smart phones, they are actually referred to as feature phones as these mobile phones don't have a touchscreen (usually the most expensive component in smart phones, about $10 for 320x240 screen), a keyboard (keypad only) or large internal storage (usually 5 GB where 2.5 GB is dedicated to the operating system and built-in apps — for example, the camera). These mobile phones can accept external storage via a micro-SD card up to 32 GB. To make matters more interesting, most of the applications for KaiOS can only be downloaded from KaiStore (their app store and repository) are free (profit via advertisement using KaiAds) keeping the over all cost of ownership low.

Now don't call them dumb mobile phones as they offer more than mere mobile phones that may have a built-in app to store contacts. At the same time, they are not smart phones as KaiOS offers fewer bells and whistles. mobile phones running KaiOS, as just mentioned, are referred to as feature phones.

This is a brand-new market mostly abroad — African countries especially. Various phone manufacturers use KaiOS as the operating system of choice rather than creating proprietary operating systems. If you decide to take advantage of this market as a true capitalist, you either have to invest millions of dollars in KaiOS Technologies to further development of this technology or wait for it to go public. (if ever).

By the way, if you're a nerd, you'll agree that some of these feature phones are sexy.

Since all apps are free, KaiOS offers developers a way to profit from their apps (for example, `myCoolApp`) via KaiAds. It offers a share of the advertisement (some third-party product or promotion — for example, `myCoolStore`) that usually runs at the start of the app (`myCoolApp`). Some apps like news feeds have advertisements embedded in the articles.

As mentioned before, the inexpensive hardware allows the price to be low creating a brand-new market over-seas. With a $22 million investment from Google to possibly secure its presence in this market and $7 million investment of mobile provider Jio (India), KaiOS is currently the leader of this limited market abroad. Profit comes from the volume of units sold with its operating system rather than selling a handful of mobile phones with a price tag of over $1000 like Apple and Samsung do. KaiOS is not for cutting-edge (bleeding-edge) technology, but rather for more robust and heavily tested technology.

This is not directed to the American market. Hence many customers in the United States don't know about this technology. Interestingly enough, several providers sell mobile phones with KaiOS (not advertised and sold as such) to the elderly who are more concerned of making calls in the case of a medical emergency and don't need all the apps and/or facilities that smart phones provide.

Boot to Gecko (B2G)

KaiOS is built on the code of the defunct Firefox OS and the also defunct Boot to Gecko project. Gecko is the current web browser engine developed by the Mozilla Foundation for its Firefox browser. As soon as Firefox OS was discontinued (2013-16), KaiOS was born in 2017. This is a perfect example of capitalism where an individual exploits the need of a market (users with low and/or disposable income) using an open source technology developed by another organization — in this case, the Mozilla Foundation.

A true capitalist wants to make money from any source and/or potential venture. As such, KaiOS Technologies wants to make a profit providing a product (its operating system) and a service (being able to control the hardware of a feature phone).

As true example of capitalism, KaiOS Technologies found a necessity in developing countries — the ability to afford an inexpensive communication device. At the same time, KaiOS Technologies decided to provide an operating system for these inexpensive feature phones.

KaiOS Technologies licenses this product to phone manufacturers. These companies don't need to worry about bugs, releases of any software or technical support of the software running on their hardware. In other words, KaiOS Technologies makes a profit licensing and via KaiAds (its advertisement branch) on most apps in KaiStore while the manufacturer makes a profit selling these devices with a recognized operating system — mostly abroad rather than in the United States. Meanwhile KaiOS Technologies has raised over $50 Million from investors in the United States and abroad while securing 17.2% of the market share after 69% of Android and 9.3% of iOS.

The product of these manufacturers running on KaiOS is sold in stores around the world — mainly in the continent of Africa. These stores make a profit for each unit sold.

Everyone makes a profit. Now this is true capitalism — finding a need, offering a solution and making a profit from these goods and/or services.

By the way, capitalism works with competition — in this case Android Go (a heavily scaled down version of the Google operating system), Sailfish OS and various other operating systems. Competition forces each company to make a better product since bad or old products die off in the market.

1. https://vintageos/kaios.html (my website)
2. https://www.kaiostech.com/ (KaiOS official website)
3. https://www.theverge.com/2019/7/22/20703872/whatsapp-kaios-nokia-8110-jio-phone-feature-phones
4. https://techcrunch.com/2019/05/22/kaios-raises-50m-more-hits-100m-handsets-powered-by-its-feature-phone-os/
5. https://fourweekmba.com/kaios-feature-phone-business-model/
6. https://www.androidauthority.com/india-kaios-market-share-885349/
7. https://www.makeuseof.com/tag/what-is-kaios-mobile-os/