FreedomPop starts making its own low-cost smartphones, starting with a 7-inch phablet

FreedomPop isn’t content with selling refurbished Sprint phones, so it’s decided to start making its own. Or, more accurately, it’s started paying a device maker to manufacture low-cost Android smartphones. Starting Wednesday, FreedomPop will begin selling the Liberty — a small tablet or extremely large-screened phone, depending on how you look at it – for $89.

Most people would call the Liberty a tablet since the device has no cellular connectivity (but does have a 7-inch screen). Its only radio is Wi-Fi, which almost anywhere else would make it a data-only device. But FreedomPop offers its voice and SMS services entirely over IP channels, meaning the Liberty can make calls and send text messages like any cellular device so long as a Wi-Fi connection is available.

Starting next month, FreedomPop will offer an LTE version of the Liberty called the Frenzy, which will sell for just $99, and it has a more traditionally sized LTE Android phone priced at $89 slated for late this year or early next.

FreedomPop Liberty Angle

The question you’re probably asking yourself is why a mobile virtual network operator (MVNO) that specializes in budget plans (FreedomPop’s barebones voice and data plan are free) and doesn’t even have a million customers yet is producing its own line of phones. For CEO Stephen Stokols the answer is simple: there aren’t enough sub-$100 smartphones available in the U.S., so FreedomPop decided to create its own market.

Since it launched its smartphone plans last October, FreedomPop has been relying almost entirely on refurbished [company]Sprint[/company] phones (since Sprint supplies FreedomPop’s LTE and WiMAX connectivity, the MVNO can only use Sprint-configured devices), but Stokols now estimates he’s buying up 90 percent of Sprint’s refurb stock.

“If we’re going to grow to the point where we’re activating 50,000 or 100,000 phones a month, we needed to get another source for devices,” Stokols said.

Where exactly FreedomPop is sourcing these phones, Stokols wouldn’t say. He hinted that FreedomPop is working with an Asian device manufacturer, and he confirmed that FreedomPop isn’t simply buying stock phones from that manufacturers. The upcoming 4G phones need to be customized specifically for Sprint’s LTE network (they won’t support 2G or 3G), Stokols said, adding that FreedomPop will use one of the established Android reference designs to keep costs low.

A betting man might surmise that the reference design is Android One and the manufacturer is located in India. It just so happens that Android One is launching in India this month targeting the $100 smartphone. There are a few things that don’t add up in that scenario, though. Android One is designed to allow device makers to take advantage of the latest version of Google’s OS, which today is Android 4.4 KitKat. The Liberty runs Android 4.2.2 Jelly Bean, and it also doesn’t meet some of Android One’s minimum device specs. For instance, it has a 4-megapixel rear camera, not Google’s specified 5-megapixel minimum.

But [company]Google[/company] isn’t the only one with a phone design in a box. [company]MediaTek[/company] has long supplied emerging markets with low-cost Android phones through its reference design program, and other chipmakers like [company]Qualcomm[/company] offer reference designs as well.

Source: FreedomPop

Source: FreedomPop

Speaking of specs, the Liberty isn’t going to get hardware junkies salivating, but that’s not the point. The typical FreedomPop customer is paying a few dollars a month for service if they’re paying anything at all. They’re not the type to shell out $600 to $700 for a new iPhone or flagship Android and they’re just as unlikely to lock themselves into two-year contracts in order to get device discounts.

According to Stokols, the market has demonstrated there’s a big demand for big-screened phones in the U.S., and like any other carrier FreedomPop plans to deliver them to its customers – it’s just doing so on the cheap.