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Former Apple CEO, Beats Design Firm Team on Sleek, Low-Cost Android Phones for Developing World

"I love commodity industries."

Ina Fried for Re/code

John Sculley — now there’s a name you may not have heard in a while.

The former Apple CEO is back, and is teaming with a top San Francisco design firm on a $199 Android smartphone designed to bring high-end features and looks to the low-end smartphones increasingly popular in much of the world.

 The $199 Obi SF1 in its unique clear packaging
The $199 Obi SF1 in its unique clear packaging

Sure, that’s a claim also being made by plenty of others, from global players like Motorola to startups. But Sculley, a former Pepsi chief, says he isn’t worried about diving into what has become a highly competitive, very price-sensitive market.

“I love commodity industries,” he said. “You can’t get more commodity than sugar water.”

Sculley’s Obi Worldphone SF1 (an homage to San Francisco) appears to deliver much for its low-end price. The SF1 packs a Qualcomm Snapdragon chip, along with a Sony camera, Dolby sound and a design that aims to stand out from the sea of black metal rectangles. On the looks front, Sculley is working with Robert Brunner’s Ammunition Group, the design shop that helped create Beats by Dre’s signature headphones.

“Good design doesn’t have to be expensive if you are smart about it,” said Brunner, whose design company holds an equity stake in Obi. As for software, the company went largely with stock Android (the Lollipop version for now), though it did give the icons a unique look and feel.

While the products were designed in San Francisco, the company plans to market them exclusively outside the U.S., with a focus on places like Saudi Arabia, Indonesia and Vietnam, where many people are still getting their first smartphones.

Obi did a test run last year, selling a phone designed in China under the Obi brand to see if it could build a sustainable business. Sculley notes that the company managed to garner a 5 percent market share in the United Arab Emirates even without a homegrown design.

Brunner’s design features a raised glass screen, and opts for a bigger battery over what could have been a slightly thinner design. Brunner said that was a conscious choice, knowing that access to power can be sporadic in many developing markets.

“We want them to be a comfortable fit in your pocket, but we know how important battery is,” he said.

 The $129 Obi SJ1.5
The $129 Obi SJ1.5

For those looking to aim even lower, the company has a less-expensive option, the SJ1.5, a $129 3G phone that uses a MediaTek chip. Both phones should hit the market by early October.

To reach those price points, Sculley said, the company is keeping its expenses low, especially when compared with rivals like HTC, Sony and LG.

“Obi is structured as a very scrappy startup, very lean,” he said. “We can price right up there with Xiaomi and One Plus and make money.”

Sculley, now 76, has remained very active in technology, mostly in businesses that consumers would not have heard of, like data analytics and IT supply chains. But he has retained an interest in consumer products, helping co-found wearables maker Misfit.

Sculley said he and his team were approached last year about potentially buying BlackBerry’s enterprise business. As part of the company’s due diligence in exploring that, Sculley said he got a good look at the state of the handset market and sensed an opportunity.

BlackBerry and other global brands needed thousands of workers to handle sales, customer support and distribution.

“We were astounded at how expensive the system was to support,” Sculley said. By contrast, Sculley determined that a modern company could do the same work with only a couple hundred people at most, and decided the time was right.

The company had originally hoped to be ready to launch by April, but Sculley said Brunner had the final say on when the design was ready.

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