The Fairphone 2 toured headlines a few weeks back for its new approach at modularity and its attempt to bring an ethical cause to smartphone production. We took a look at the Fairphone 2 in an article where we criticized many of its central aspects. We took an objective stance when analyzing the modularity, the price and overall value, the company’s transparency and its impact, but without proper explanations, it didn’t feel fair.
This is because our article was on the negative side, as we did not have many positive things to say about the modularity of the phone. This is not to say that there are no positive things about the Fairphone 2 — far from it. But the subject we dealt with – that is, the modularity and its value – left us scratching our heads as to why this feature was being publicized and picked up by so many Android outlets. We got in contact with Fairphone 2 so that they could clear up some of the things we discussed in the feature, to give us a better perspective as to why they made the decisions they have made, to who they aimed them, and how their improvements and efforts can benefit developers and the world at large. It’s only fair, after all, that they are allowed to answer to the feature publicly to try and put things in a better context — and our my interview with Fairphone CEO Bas van Abel, much of this was cleared out. This is what Fairphone had to say.
How did modularity come to be? How does it mix with the target demographic?
“First of all, I would like to take a step back from talking about Modular phones because Fairphone is not [really] about modular phones – we hadn’t set up to create modular phones, and the modular architecture is a result that has more to do with the supply chain than with introducing a company that puts phones in the market which are modular. You stress in your article as well, that our main focus is on supply chain, but what we want to achieve is to take a big step [from the Fairphone 1]. So when you look at the biggest difference between this version and the previous version, you’ll see that we’ve designed this one from scratch. The reason we did that was not because we wanted to make a modular architecture, but because if you design a phone, you are basically zoning your whole supply chain. What we ran into with the first device is that [it was] a licensed model. We were just setting up the company and we didn’t have the investment to actually create our own device, but we knew that at a certain point we needed to really dive into the supply chain in order to have more influence in the materials that we use, more influence in the production process, and also more influence on the actual factories we work with. By designing a phone you do all of these things: you design the processes, you design the factories, you design everything that’s behind that material thing that you have in your hand.
With Fairphone 1 being a licensed model from a Chinese factory that already made phones, we kind of had to reverse engineer our whole supply chain. So we took that phone and we changed some of the elements – we changed the chipset for something more powerful ones, changed the robustness of the phone, but we hit the editing wall in terms of being able to dive deeper into the supply chain, for example, in our fair trade goals. So we’ve worked [for a long time] already trying to incorporate fair trade goals into the supply chain, but with that [old] supply chain we were just not able to do that. The reason behind designing a phone from scratch was that – how do we get more control over our supply chain, while choosing who we want to work with? The great thing about going from Fairphone 1 to Fairphone 2 was that we already had a success so there were some manufacturers that told us “guys, we would actually like to work with you”. (…) We also found some things that we ran into with software development, we started with mediatek and switched over to Qualcomm, for example.
I wanted to ask about bang per buck ratio. Flagships have become so future proof, and in some regions there are not that many people upgrading because it’s sometimes not worth the cost, especially in countries without carrier subsidy. Something that caught my eye and I wrote about in the feature was that you could get two OPOs for one Fairphone. What made you go for those specs? Why not the a better processor like the Snapdragon 805 as well, for example?
It has to do with development time, the size of our development team… there [is so much to] how we choose a chipset. (…) There is a blog post on the hardware that explains very well why we choose that mature chipset [specifically]. We do not have the engineering capacity in-house to really go for a flagship model, because in that sense we’d be [straying] from some of the things that we want to get done, and integration with all the peripherals would be really difficult for a smaller team. So we had to find a chipset that is really state of the art but is not too cutting-edge in terms of its ratio with the other components. It’s purely a feasibility aspect. For that reason, we chose this chipset. (…) If you start comparing Fairphones and what we are doing with OnePlus, we are comparing apples with pears in terms of the value and proposition that we have. If you look at the raw specs of an iPhone, they are not better than [those of] a OnePlus One for instance. But they deliver value at a different level, by providing, for example, a completely integrated experience. You can make the same statement for any brand that focuses on more than just specs – because Fairphone is not only about specs. But, we still wanted to make a competitive device. So what we aimed for a year ago when we started doing this, when the euro/dollar ratio was still 1.35 (the price including VAT – so you’d have to deduct 20% of this price), we’d be talking about €437.5, something like that. So not €525, if you compare it with a phone like the OnePlus One, it’s €437.5.
And we were actually aiming for a phone excluding VAT for about €395 euros – around that range – but because a year ago it went from 1.35 to 1, and we are buying our stuff in dollars, the whole phone became 20 or 30 percent more expensive. If you look at the the bill of materials, it’s around 240 US dollars, and that is almost the equivalent in euros if we have to play it safe — this doesn’t include the manufacturing costs at the ODM, royalties, premiums, certification costs etc. So I don’t know what OnePlus pays for their sourcing, but they probably pay a lot less. We have negotiated, but never really pushed on the pricing because we were also negotiating worker welfare fund, special sourcing requirements, sustainability programs (…) If you have a conversation with the factory where you actually want to improve worker conditions, you don’t want to squeeze them on the bill of materials and their own added value. So there are a lot of aspects in there that make this phone this price, but if the euro-dollar was not the case, then we’d have a really competitive phone in comparison with other brands.
So it’s hard to manage the “bang per buck” and still keep up with the ethical goals. As far as the target demographic goes, who do you aim to sell Fairphones to?
Well, [regarding] demographics and modularity, we have to make a phone that will last for a good time (…) as far as the modularity, the components are replaceable to allow the phone to be used for a long time. That aspect is quite important to understand.
Really, the target group is very wide in terms of the demographics, but there’s a common theme in the people that use Fairphones, which is that people use a Fairphone because they want to be part of a movement for change in the industry. So we are in a niche – we don’t have to become the biggest company in the world, we don’t have to have a flagship killer, because it’s not our intention to kill the flagship. Our intention is to have a positive impact throughout the whole value chain by doing what we do, and what we do is innovate in social-environmental aspects, not on technology. And that addresses a certain group of people: if you look at the demographics, it’s from 14 year old kids to seventy year old women who actually write us a letter to ask if we can send the phone because they don’t know how to use the internet! We sold 25,000 phones before they were even made – we had never made a phone before, we didn’t even know how to make phones when we started selling. So the trust that people put in us was not on the fact that we knew how to make a phone or that we would make a killer phone but that we were able to make a decent device that was a statement towards the industry, that we wanted to make things different. People basically put their money where their mouth was.
So now we’ve sold 60,000 phones and 50,000 of those phones have been bought through pre-sales. To give you an idea of the craziness about it, so we sold 25,000 phones, basically a crowdfunding of 7 million — before we delivered the product, we had that already. But the weird thing that happened is was that people started selling, on ebay, their in-voices of a non-existing phone for double the price! So there were Fairphones, at a certain point, selling for 600 euros a piece… because… I don’t know! And that’s also a crazy aspect of the economic system that we try to challenge in this case — that value is something more than just the monetary aspect, and that is, I think, for a lot of people who buy Fairphone, one of the most important things. They want to equal those values of ethics and the financial aspect. And we also give a very clear cost breakdown about where every euro is going to, which we’ll do for this phone as well, so that people can decide for themselves if it’s worth the money.
It is commendable that your cost breakdown for the first Fairphone was so thorough; obviously, it is unavoidable that in the manufacturing process you could not break down every single aspect because of contracts and the like.
Yes, but we will do much more with this phone — that is also one of the reasons that we decided to design [our own phone].
When you are trusting a company, a charity, mainly, you need to know that they are transparent enough. There are so many companies that try to do similar models that end up in scams or scandals.
I wanted to touch on longevity – something very important to users on XDA as well. Android M, for example, is going to bring a lot of functions and features that people will most likely love… Android Pay… the software support in general. How do you plan on supporting the device?
On the software side, one of the things that we really looked at is to [get help] from developer communities to extend that lifetime. We have to do that as a small company, that’s one thing, but the most important thing is that we believe in creating platforms with the power and intelligence of a group of people – through open source principles – to keep things alive. We have to do that because we don’t have all the knowledge. We don’t know how to solve wars in Congo, you know? So we worked with multistakeholder initiatives there, including NGOs. So I think we need open source communities, because we also believe in that way of working. We provide the source with witch open source communities can [help] maintain the software. We ran in some challenges with [our previous chipset] and we believe that by working with the Qualcomm chipset we can offer a better ecosystem for external developers. So with Qualcomm, what we did is to look into code aurora so that we can actually have the developer community there create their ROMs (…) to give them the tools to develop their own software systems for software and allow for maintenance as well.
On the hardware: one of the things that was in your piece was that the production phase of the phone is basically one of the most energy-consuming steps of where the footprint sits. So what we really focused on [when developing the phone from scratch] was that the phone was going to be used as long as possible. There are several things you can do; if you use the phone as long as possible, [we] can just create less phones and the manufacturing side is the main problem because that’s where most of the CO2 and all the footprint is. So if you can get users to use the phone from 2 to 5 years, that would actually result in half the phones being produced, which would be great! It’s not in the model of every company to produce as less phones as possible, but for us it’s very important to look at all the business models around because we don’t have a profit-driven focus. So, the area we focused on first of all was robustness – creating a phone that if you drop it from 180cm it doesn’t break, or doesn’t break much – in such way that it is robust but that it still has a design element to it. But unfortunately we were not able to actually make a phone that doesn’t break, so what we said was “if the phone breaks, we want people to be able to repair it themselves”. So it has to be consumer-repairable. We never said it has to be a modular phone, we said it had to be consumer-repairable. So what we’ve done by creating a modular architecture is isolate all the parts that could break – you know, the usb connector, the jack sockets, the camera, the screen, all these things – and the user has to be able to just replace that themselves.
That was the starting point. And there is a third element, and that’s what we truly believe in. Maintenance, fixing things… there’s a psychological lifetime for things. People might think that they need a new phone every year ([perhaps] not your XDA demographic that want to have the best phones), but not all people need a phone every year or every two years. And we think that by offering a phone to people which they can actually open, they can show the insides and tell the story, because most Fairphone users are proud of what they bought and what they want to show and tell a story through, that extends the psychological lifetime. ifixit has this logo that says “repairing is caring”, right? So, we truly believe in building this open device – and I am talking about openness in all aspects, and not only open source but also the hardware, where you can really open the device, (…) and tell people “look, this is from that [particular mine], this is from that one”. All of this is [something we focus on].
So the modular architecture facilitates a story-telling element as well, which we think will extend the psychological lifetime to put into the maintenance of their phone like they do with their car. Of course, because it is a modular architecture, there are also additional advantages like, if you have a type C usb at certain point and you really want to have that socket there, you can upgrade it [to that] and look at upgradability of some of the components, which is super important for us. Not in terms of getting a faster and sleeker phone, but the problem with the supply chain is that most of these components will not be around two years from now! So how do you offer spare parts for the next five years, if you want people to use the phone for the next five years. Well, the only way to do that is to isolate the phone into these little modules and make sure that if you have a component that is at end-of-life, you can replace it with something that fits in that module. Then you can offer your customers a phone that is really repairable. And that was the point of the modular architecture, not to configure your phone and put all these things that you might not even need.
The open source aspect, where are your efforts going? How did you think Fairphone is impacting the industry at large?
Our demographics are users that use Google services, Google apps, so we are committed to provide a phone with Google Services. But we are also looking to provide alternative operating systems like Jolla. All software we develop ourselves is released as open source so we have a small operating system layer that takes away some of the “user experience obstacles” of Android. We keep it to a minimum, but on the other hand we really want to offer a bit more of an experience – which is all open source.
With the Fairphone 1 we [did receive support and] had contributions, translations. For the Fairphone 2 we want to improve on that, and we want to take it a step further and really go into the open hardware as well. We want to release the blueprints of the back cover, some of the modules maybe, to give some context and support before [customers] open it, because they need to have some support. The idea is to have more and more people involved in terms of hardware and software development of this phone. (…) We want to give our users transparency, and this is one of the best ways. (…) And it’s not just for us, we want to make it fair for owners. (…) We can’t change the world from one day to another, and on transparency you also have to show the stuff you can’t do.
There are hundreds of factories that have problems, and by mapping it we can definitely work together on figuring out what needs to be done. It is very hard now to say what will happen (…). The main thing we want to do is to inspire people to do things differently. This is the only way that things are going to change. (…) I also think that things are going too slow. Our role in this whole thing is to create space for the big guys as well. We can say that all these companies should care more about the ethics, or environmental issues… But if consumers expect to get bang for buck all the time, they have to look at themselves and ask “ok, so what exactly is my role as a consumer? And what is my responsibility in making sure that I don’t consume more than a ridiculous amount of electronics?” But it is my role in terms of what I can ask in terms of how they produce products. It might result in more expensive products, I don’t know. It might result in more space for these companies to do something, where they don’t need to pay their shareholders as much… It would influence our pension funds, for sure. But they are all systems. So the thing that will change this situation is thinking about putting financial elements next to human values, and that is where the real systemic change is going to happen and where our economic systems have not been equipped properly at the moment. Companies are just systems — and it’s up to people to change those systems.
Is there anything you would like to say to the XDA community?
We hope to engage with you at a deeper level than we have so far, and we are looking forward to really working together on Fairphone 2!
Thus the interview concluded. Despite so many blogs and users clinging to the modularity of the phone as a primary and central feature, Fairphone claims that this was only designed as a way to facilitate their ethical goals. The company did provide reasonable explanations for the pricing model and their campaign, and they explained what steps were taken to improve the consumer experience. Moving from their previous Mediatek chipset to a Qualcomm one will undoubtedly open the doors for developers to take advantage of Fairphone’s open source efforts as well. In my interview with Fairphone, their enthusiasm was palpable, and while I do not agree with some of their views, they have a very grounded outlook on what they are trying to achieve.
Power users are not Fairphone’s target demographics, and I know I wouldn’t buy a Fairphone 2. If you are on XDA, you most likely wouldn’t either and that’s more than fine. With this being said, I do acknowledge that there is a place for companies like this, and their efforts for a just cause. While our personal views on the product itself haven’t changed, we now know that the company behind it seems to have the right intention. It’s just not our kind of phone, and it seems that its modularity brought it attention for the wrong reasons. While my original criticisms remain valid, I think that Fairphone’s efforts in transparency and communication are commendable — fair and square.
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