Some answer this question comically by observing that disposable phones combine 2 of Americaís favorite pastimes ñ yapping on the phone and throwing things out. Although, for the players hoping to strike it rich in this business, it runs much deeper than that. The disposable phone startups believe that the Promised Land lies either in the niche markets within developed, cell phone centric economies or within the expanse of low-income communities either in the USA or emerging markets who cannot afford to purchase a traditional cell phone. With big money at stake, several players are racing to see if disposable phones can do for them what disposable cameras did for Fuji and Kodak.
The opening paragraph of the Introduction
touched on two niche markets for disposable phones: Impulse Buyers and
Safety/Emergency Buyers. Add to these the niche segments of
Pre-Teen/Youth, Techno-phobic and the Traveler and the niche market is
complete. Letís briefly take a look at each of these segments.
Impulse Buyers are those who find themselves without a cell phone and need one, usually for a short period of time. Forgetting your phone while out on the town to meet some friends is as good an example of a purchase motivation. Just slip into a convenience store, and for only slightly more per minute than you would pay on your regular phone, you can have a disposable phone to use for the evening. This niche also captures instances when you are leaving for an activity or an event, such as a rock concert or a rafting trip where you donít want to risk losing or damaging your traditional cell phone. Simply pick-up a disposable instead.
Safety/Emergency Buyers are another
often-targeted segment. These
buyers stash disposable phones away in their cars (maybe in the
trunks), bedrooms or basements to be prepared in 
case
the proverbial ìanythingî should happen.
This segment overlaps the Pre-Teen/Youth segment when it is a worrisome
parent stuffing a disposable phone in Johnnyís/Jennyís backpack ìjust in
caseî.
The other spin on Pre-Teen/Youth Users is that the disposable phones will be perfect for young kids who may want/need to keep in touch with their parents throughout their day. If parents donít feel comfortable giving their 7-yr old a $300 Nokia, then a disposable may come in handy. Disposable phones can be viewed as training wheels for "real" cell phone ownership. It is also worth mentioning that the marketers expect that the disposable phones will not be popular with the older teens that are frequently chased by mainstream wireless carriers. This segment is ultra fashion conscious and may view the simplified disposable phones as not being ìcool enoughî.
The Techno-phobic crowd is likely a small one and consists of folks who are intimidated by todayís flashy, complex cell phones and would like something, which is more user friendly. As some disposable phones are very simple in design, even looking much like a home phone, it is hoped that technophobes will be receptive to them at some level.
Finally the Travelers are those people getting off
planes who would prefer to purchase a disposable phone loaded with local,
inexpensive minutes rather than burn relatively expensive roaming minutes.
This may be especially successful in cases where international telecom
standards make the Travelerís home phone inoperable in a foreign market.
Although the niche markets
discussed above are the most often considered opportunities for disposable
phones, they may not be the largest opportunity for the ìtalk & trashî
manufacturers. There exists an
enormous potential market for disposable phones within lower-income households
throughout the world. In this Emerging
Market segment, the cell phone is frequently the only means of communication
available to a household. This is largely due to the limited penetration
of landline services into the low-income communities. Further, where there is service, it is generally
poorly maintained and subject to frequent and prolonged outages.
Therefore, for millions of people, the only options available to them are cell
phones and payphones. Payphones
may suffice for out-bound calls but are clearly insufficient for inbound
calls.
Also, from another perspective, the cell phone is more than just a means of staying in touch with family and friends. It can also be the critical link to a dayís wages. Wages which will put food on the table for the next few days. In this field, the cell phone serves as a competitive advantage for a local laborer. In a income segment where most people survive as casual or temporary laborers, it is crucial for the worker to be able to receive information regarding any job opportunities. If an employer understands that he can phone a specific laborer because he/she has a cell phone, this laborer will receive more work opportunities than a person without a phone.
Although there are compelling reasons to own cell phones in these markets, sales of phones are slow. The reason for this is because the costs of the device forms a substantial barrier to the consumer. In most emerging markets the wireless providers do not subsidize the cost of the handset as is common practice in developed nations. This means that the low-income consumer must pay full sticker price. With many emerging nations having an average annual household income of less than US$1000, the purchase of a US$100+ cell phone is a great burden. Marketers of disposable phones hope that by offering disposable phones with replenishment plans, more low-income families will be able to own their own cell phone and therefore improve their quality of life. If successful, sales of disposable phone could run well above 10 million units in the next 3 years within this segment.