By Seth Weintraub
January 25, 2011

The T-Mobile Comet is now $120 with a $25 credit for calls, with nothing more to do, ever.  Here they come!

T-Mobile’s Comet, a re-branded Huawei Ideos handset, is now the low cost king of smartphones.  Amazingly, it is running Google’s (GOOG) Android 2.2 Froyo *sneers at Galaxy S line* and has a lot of the features that higher-end smartphone buyers are looking for.  For instance, it has 3.2-megapixel camera with camcorder, Google Maps navigation, digital media player, microSD card slot, USB interface, Bluetooth, tethering and WiFi hotspot capabilities.

Engadget reviewed it and rated it highly for a bargain device.

When you purchase the phone, you have nothing more to buy ever.  You could use it just on Wifi for VoIP for instance.  You could also take it overseas or give it to a kid as an iPod-type device.

That’s an important distinction, because many consumers think that a free phone bundled with a two-year plan is really free.  It isn’t.  Often, the early termination fee is $350 and you pay a $15-20 subsidy every month.

Another Huawei phone carried on Vodafone in the UK recently dropped below $100, but this is the first smartphone to drop below the $100 barrier in the U.S.

The psychological $100 barrier is an important one because it will allow feature phone users, who make up the majority of U.S. mobile phone users (by a big margin), to upgrade to smartphones and start browsing the web, use maps, email, etc.

More web usage is what Google is after.  More web usage means more Google advertising.

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