As iPhone X raises the bar and price of smartphones, some consumers opt to switch to 'dumbphones'

Mike Juang, special to CNBC.com
Key Points
  • As the Apple iPhone X ups the ante on smartphone features and cost, some consumers are opting for 'dumbphones' with limited features and are even willing to pay a premium.
  • Start-ups, including Punkt and Light Phone, are selling back-to-basics mobile phones that cost hundreds of dollars.
  • The trend stems from smartphone users worried about overreliance on technology in daily life.
Attendees take pictures of new IPhone models during an Apple launch event in Cupertino, California, September 12, 2017.
Stephen Lam | Reuters

Leave the old Nokia at the back of the drawer where it belongs. Companies catering to consumers who want to disconnect from their smartphones are making 'dumbphones,' which are attractive, simplistic and sometimes even pricey.

According to a 2015 Pew Research survey, just under half of Americans (46 percent) said the smartphone is something they couldn't live without, a number that's not likely to have gone down in the two years since the survey. Smartphone dependency is real and manifests itself in many daily routines: Like that time you heard the familiar message 'ding' while in public and you dug at the phone in your pocket, only to realize it was actually the phone of the person next to you. And everyone else around you did the same thing.

Awareness is not enough to kick the addiction. New York-based educator Gary McLoughlin, a learning specialist at Manhattanville College, said his younger nieces would "constantly have their phones on the table, and they're always scrolling and checking things, and I found this not only hard to understand but really offensive."

Yet McLoughlin still found himself unable to disconnect. "I was awake in the night just to check my phone, to check what was happening. It really became worse and worse. And then I asked myself, What am I checking for? What has changed in the last five minutes?"

Luring the smartphone crowd with bare-bones but classy alternatives

The Apple iPhone X, to be released on Friday, raises the bar for both phone features and price, starting at $999 and reaching to $1,150. But more mobile power users are seeking ways to power down, and dumbphones — which in one case has the financial backing of iPhone manufacturer Foxconn — are being engineered specifically to lure in the smartphone crowd with its scratch- and impact-resistant glass, feather-light weight, ultralong battery life and a minimalistic, easy-to-use interface.

"I had a stepdaughter at the time who was so hooked on her telephone that I had to — we had to— argue every day, whether it was at dinner or going to bed, that she had to put her phone away," said Peter Neby, founder of Punkt, one of the start-ups in the dumbphone market.

"Our design is driven by functionality," Neby said. "Where you don't try to scream, 'Look at me and how different I am.'" He added, "It is about how you can define a phone that represents what it does."

With a Punkt, you basically see what you get. A phone. A contacts book. And text messaging. That's it. No games, no camera, and no way to get the phone to display anything other than the time. But the phone's design evokes a minimalism that's inviting and visually striking compared to other phones, recalling Braun calculators with round buttons, clear numbering and understandable icons.

The Punkt mobile phone face includes a small, readable screen; full, physical number pad with offset navigation; shortcut keys to the left and a four-hole speaker grille near the top.
Mike Juang | CNBC

The Punkt mobile phone face includes a small, readable screen; a full, physical number pad with offset navigation; shortcut keys to the left and a four-hole speaker grille near the top. The sides include large, easy-to-press volume and power keys. A large speakerphone is set in an oblong back that feels good in the hands, and despite being plastic, the phone is coated in a durable coating evocative of the high-quality paint found on DSLR cameras.

The Punkt Mobile's screen is higher resolution than most typical dumbphones, although it's still easy to make out jagged lines. It's technically a color screen, but the minimalistic interface really lends itself to black and white. The interface is designed around rotating items out of the center in the same way an analog watch shows the date in a small window on its face.

There's just one catch: a $295 dollar price tag.

"Price is a perception," Neby said. "There are very few people in the world who can't afford that." He considers the phone an investment rather than a large expense. "It's like anything in life: Why do you buy cutlery when the plastic or very cheap steel knife cuts anyway?"

McLoughlin is in the market for an alternative but has so far balked at the high cost of these 'dumb' devices.Today he uses an old cheap flip phone, the Samsung Convoy.

Punkt declined to provide sales figures, but says it has manufactured between 50,000 and 100,000 phones since coming into the market in September 2016.

The Apple Watch, rather than the iPhone, may be the apt comparison

If the Punkt mobile stands out for its back-to-basics phone options while retaining the basic smartphone design, the Light Phone stands out for how little it resembles a phone.

A slick slab of glass and plastic, the Light Phone's simplicity is eye-catching. The only indication of the technology beneath the glass are the three holes located near the top of the device that hide a speaker. But it is still a full-on phone, running a customized version of Android, and includes several basic features: the ability to change ringtones and display basic phone stats like battery life and signal strength. Its cost is $150 plus a $5-per-month service subscription that reroutes smartphone calls to the Light Phone line. It comes with software and a SIM chip that reroutes an existing smartphone number to Light, and the Light phone then operates independently using its own cellular module.

A slick slab of glass and plastic, the Light Phone's simplicity is eye-catching. But it does one thing only: makes calls.
Mike Juang | CNBC

The Light Phone does one thing only, and that is make calls, and by that metric alone it may not justify its asking cost. They're serviceable, but not as clear or as high-quality as they would be on a regular phone. But co-founder Joe Hollier argues that that's the point. "We created this philosophy for the phone, which was designed to be used as little as possible," Hollier said. The team modeled the device's size after credit cards, making it easy to slip into a wallet or cardholder. "We wanted it to be as invisible as possible," he said.

Hollier promotes the Light Phone less as a mobile phone and more as a transcendental experience. He calls times away from the phone "light trips," and the act of leaving behind the smartphone and using the simpler device as "going Light."

More from Disruptor 50:

MongoDB raises $192 million IPO
Japanese start-up taps into space boom
A mobile app that can destroy your privacy

"I had different cameras, different shoes for different occasions," Hollier said. "Why do I have one smartphone for all occasions?" Gangly and thin, Hollier still embodies the skater archetype that he says defined him when he was younger. His right arm sports a tattoo, partially obscured by the solid pink T-shirt he wears, with the words: "Let's be human beings."

Light Phone said it has sold about 10,000 phones in 71 countries — 3,000 phones through Kickstarter and 7,000 through its website.

It raised $400,000 on Kickstarter and went on to raise $3.2 million from investors over the past three years. One investor, which invested $1.7 million, is Taiwanese manufacturing giant Foxconn, which makes the iPhone.

Start-ups are not the only tech companies capitalizing on a shift to the simple.

Former mobile phone behemoth Nokia, now owned by HMD, launched a modernized version of its popular 3310, a colorful slab that took pride in its dumbphone trappings, playing up its durability and battery life.

Apple released its Series 3 Watch with a built-in cellular radio, which, coupled with software, allows users to leave their phone at home. This became a heavily advertised feature: The Series 3 Watch was introduced by an employee in the middle of a lake to demonstrate its phone-free power.

— By Mike Juang, special to CNBC.com