Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.
It seems that Solana’s attempt at tying hardware to software is off to a rocky start. Since the launch date of June 23rd, people have pre-ordered 2,872 Solana Saga Phones. Within three days, the pre-orders climbed to the 2k threshold, but are struggling to reach 3k to this day.
Solana Saga pre-order numbers. Image credit: Dune Analytics (@aa007zz)
This is a concerning figure for the future sales of this Android smartphone, as it represents only 0.02% out of monthly active Solana addresses for July.
Even if one is generous and assumes that every Solana user holds 10 addresses, this would still fall short of a single percentage point. Those who preordered Solana Saga phones had to pay $100 to register, delivering Solana Labs $287,200 income before taxation.
However, when it comes out in early 2023, Saga is supposed to be priced as a flagship Android smartphone, at around $1,000.
What are Solana Saga’s Specs?
Anatoly Yakovenko, the head of Solana Labs which develops and maintains the Solana blockchain, introduced the Saga phone on June 23rd. The goal was to provide Solana users with the best Web3 experience, from NFT shopping to lending dApps.
Within the new subdivision Solana Mobile, Saga is at the front end of the trendline. In 2017, a screen size over 6 inches constituted merely 9.2% of the market share. Two years later, the same screen size grew to 43.4% market share. Solana Saga joins this trend at 6.67 inches. Other specs include:
- OLED 120 Hz display – because it operates without a backlight it uses less battery, but it is more expensive
- 512GB of storage
- 12GB RAM
- 4,100mAh battery
- Two rear-facing cameras, at 48 and 12 megapixels. The front-facing one is 16MP
The phone is encased with stainless steel and titanium with a ceramic back. Qualcomm’s Snapdragon 8 Plus Gen 1 processor powers it, consisting of 8 cores at 3200 MHz clock speed. It is currently ranked third in CPU power, with Apple’s A15 Bionic still holding the first place.
Who is Behind the Solana Saga?
The company in charge of building Solana Saga is OSOM, headed by Jason Keats. The startup was formed from the remnants of Essential, after having launched their Essential Phone. The phone flopped because it didn’t bring something new to the smartphone table, resulting in severe price slashes and layoffs.
With that experience under their belts, OSOM employees developed OSOM OV1, now rebranded as Solana Saga under the aforementioned specs. Keats explains partnering with Solana as a case of matching needs.
“Hey [Anatoly] needed someone who could build hardware and arrange for it to be manufactured, who knew the players in Asia to actually build a quality device. We needed a user and a customer base that was excited about consumer choice, self-custody and individual privacy.”
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Does it Make Sense to Launch a Blockchain-Centered Phone?
The poor pre-order Saga numbers speak for themselves. However, it also must be said that Solana is struggling with its centralized image. After seven outages and network restarts, many investors have questioned Solana’s future.
In fact, Californian investor Mark Young filed a class-action lawsuit against Solana Labs and associated VC firms. The complaint states that the company violated securities law. Moreover, that Solana is “highly centralized”, which is likely the cause of so many outages.
As a result of this branding problem, Solana has fared significantly worse in this bear market, despite offering lower fees and faster transaction times than Ethereum, which it had outperformed last year by +500%.
Year-to-date (YTD), Ethereum outperformed Solana by +16%. Image credit: Trading View
It is then predictable that Solana Saga would not gain much traction, as it attaches itself to a troubled blockchain. More importantly, it is dubious if there is enough space for a Web3-specific phone. After all, Web3 is simply a software stack that can run on any modern smartphone hardware.
Furthermore, Solana shrunk its market share from November 2021 to today by -50%.
Now, even Polygon, on an Ethereum sidechain, is poised to overshadow Solana’s TVL, with Avalanche and Tron already having surpassed it. Lastly, is the market ready for another flagship phone to begin with, now that consumer power is rapidly shrinking due to the rampant inflation?
In the end, deep-pocket giants like Apple and Samsung can simply add Web3 branding, as the need arises. They could simply use a fraction of their marketing budget to that effect. It is quite telling that they haven’t seen the need to do so yet.
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About the author
Tim Fries is the co-founder of The Tokenist. He has a B.Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird’s US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.
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