Web3 phones still need to prove whether their product capabilities (such as security design and dApp ecosystem) can surpass the attribute of being merely "financial arbitrage tools."
Written by: Frank, PANews
Once highly anticipated by the industry, the Web3 phone Solana Saga ceased its technical support just two years after its launch. It went from being ignored to sparking a buying frenzy due to airdrops, and then to a hasty conclusion, leaving the devices of 20,000 early users almost as "electronic bricks."
The dramatic reversal of Saga has sparked a wave of sighs and profound questioning throughout the industry: Is the route of crypto phones a false proposition? Was Saga's brief and brilliant lifecycle an expensive failed experiment, or did it illuminate a non-traditional path to success for future entrants? With Solana Mobile fully transitioning to its second-generation product Seeker, these questions have become even more urgent.
Only two years of support announced to cease, multiple considerations behind Solana Mobile
The abrupt end of Saga was unexpected.
According to the norms of traditional phone manufacturers, technical support for a phone typically lasts 5 to 7 years. However, Saga's support lasted only 2 years before it was declared over. The main reason behind this may reveal the significant differences in operations between smart hardware products and general Web3 projects.
From a business perspective, the Saga project was almost destined to incur financial losses. The Saga phone sold approximately 20,000 units, far from its sales target of 50,000 units, which could not cover the R&D, production, and marketing costs of high-end hardware. Even niche models from traditional phone manufacturers usually require sales in the hundreds of thousands to ensure operational viability. Providing long-term support for a product line with only 20,000 users is a heavy financial burden.
To make matters worse, Saga's hardware partner OSOM went bankrupt in September 2024, making long-term firmware and driver updates nearly impossible. Therefore, Solana Mobile's abandonment of Saga became a rational, even inevitable, business decision. They chose to cut losses and concentrate limited resources on projects with a higher likelihood of success.
From a hardware perspective, Saga was itself a well-equipped high-end Android phone. Compared to ordinary phones, its built-in security design and dApp applications did address the pain points of transaction security and dApp access for heavy crypto users. However, Saga's failure proved that these enhancements in "product capabilities" were not enough to convince users to pay a $1,000 premium, as the vast majority of Web3 tasks could also be completed on regular phones, albeit with slightly different experiences.
The most direct threat is the sharp increase in security risks. As new vulnerabilities are continuously discovered, Saga phones will become increasingly susceptible to hacking. For a device whose core design philosophy is to securely handle crypto assets, this is undoubtedly fatal. Secondly, there is the issue of "diminishing utility." With the continuous iteration of the Android operating system and dApps, Saga may not be able to run newer applications, ultimately leading to "potential application failures" and functionality loss.
Moreover, the previous sales miracle of Saga was not due to the market rediscovering its product capabilities as a phone, but rather the value of its financial arbitrage tool being unearthed. However, this model is unsustainable and fraught with risks. It attracts speculators seeking short-term profits rather than genuine users loyal to the product and ecosystem. Once the expectations for airdrops diminish or the market cools, this demand will evaporate rapidly.
As phones are the most important hardware devices in today's society, the actual usage scenarios extend far beyond airdrops and crypto activities. This is also a primary reason why Saga sold well but seemingly went unused.
However, the direct consequence of this business decision is borne by those 20,000 Saga users. Solana Mobile's announcement to cease all software updates and security patches means these devices will remain permanently on the last security version from November 2024.
Surprisingly, there was almost no noticeable reaction from users on social media regarding the news of the cessation of technical support. After media reports, Solana Mobile chose to remain silent, only increasing the frequency of retweets related to Seeker activities. This phenomenon suggests that the actual number of active users of Saga may be far lower than the proportion of users who claimed airdrops.
From being ignored to being hard to find, the luxurious airdrop brought a sales reversal
Looking back at the lifecycle of Solana Saga, it resembles a roller coaster trajectory.
In May 2023, the Saga phone was officially launched, priced at a staggering $1,000, directly competing with flagship models from Apple and Samsung. Solana Mobile's initial goal was to create a native Web3 device for crypto users and developers, breaking the duopoly of Apple and Google through hardware-level security (seed vault) and an uncensored dApp store. However, this grand narrative failed to resonate with consumers.
After its launch, the market response to the Saga phone was exceptionally tepid. By early December 2023, more than six months after its release, Saga's sales hovered between 2,200 and 2,500 units, far from the "developer ecosystem critical point" of 25,000 to 50,000 units set by Solana co-founder Anatoly Yakovenko. To salvage the situation, Solana Mobile significantly reduced the price by 40% to $599 in August of the same year, but this move still failed to effectively stimulate demand. The mainstream tech community was particularly ruthless, with renowned reviewer Marques Brownlee (MKBHD) labeling it as "the most failed smartphone of 2023," a title that accurately encapsulated Saga's awkward predicament at the time.
Just as Saga was about to be forgotten by the market, an unexpected catalyst completely turned the situation around—MEME coin BONK. Each Saga phone came with an airdrop of 30 million BONK tokens, which had negligible value at the time of release. However, as the Solana ecosystem fully recovered by the end of 2023, the price of BONK skyrocketed exponentially.
By mid-December 2023, the value of this airdrop had exceeded $1,000, far surpassing the phone's price of $599 at the time. A clear arbitrage opportunity emerged: buy the phone, claim the airdrop, and gain instant profit. This news spread virally on social media, and Saga's narrative instantly transformed from a failed tech product to a hot financial tool.
Sales surged dramatically. In just 48 hours, Saga's sales increased more than tenfold and quickly sold out in the U.S. and European markets. A frenzied secondary market emerged, with brand new, unopened Saga phones selling for as much as $5,000 on platforms like eBay, more than eight times their retail price. Saga was no longer just a phone; it became a "ticket" to potential future airdrop wealth.
The unexpected sellout of Saga provided Solana Mobile with a new insight: potential airdrop expectations could significantly stimulate market demand. They quickly seized the opportunity, announcing the launch of the second-generation phone "Chapter 2" (later renamed Seeker) just a month after Saga sold out in January 2024. As mentioned earlier, Seeker learned from Saga's lessons: the price was significantly reduced to $450-$500, with hardware specifications more aligned with the mid-range market, targeting a broader audience.
The market response was explosive. Driven by strong expectations for future airdrops, Seeker received over 60,000 orders within the first three weeks of open pre-orders, ultimately surpassing 150,000 reservations, expected to generate over $67.5 million in revenue. Even before the phones were shipped, the value of tokens like $MEW and $MANEKI airdropped to pre-order customers had already exceeded the cost of the phone. From this perspective, Saga served more as a stepping stone, helping the second-generation product Seeker build an ecosystem base with over 100,000 users and a sales model driven by airdrops.
However, for the more than 150,000 Seeker pre-order customers, will the devices they hold also face the same fate as Saga in two years?
Fully transitioning to the second-generation Seeker device, can it break the Web3 phone dilemma?
Saga's experience forces us to re-examine the core proposition of Web3 phones. Is it truly an innovation with real product capabilities, or is it a "false demand" that relies on external incentives to survive?
As a second-generation model, Seeker is attempting to avoid repeating the mistakes of its predecessor. After ceasing support for Saga, Solana Mobile has fully shifted to the second-generation product Seeker, a phone priced lower and still focused on crypto functionality, starting at $500, half the launch price of Saga, with early pre-order users enjoying a $50 discount. In addition to being more reasonably priced, Seeker also inherits some features from its predecessor while upgrading hardware and adding several user-friendly new features, such as SeekerID and an improved decentralized application store.
Notably, Seeker plans to launch a native ecosystem token SKR to incentivize developers and users, promoting ecosystem development and achieving better alignment. Although the specific details of the token have yet to be announced, the official statement indicates that it will be directly distributed to developers and users. Furthermore, Seeker has strengthened incentive programs linking other applications and activities within the phone ecosystem.
For example, Seeker has launched an event with the wallet application Backpack, waiving the first $1,000 transaction fee on Seeker phones. On October 23, Moonbirds also launched the Seeker X Moonbirds SBT airdrop for Seeker. According to official data, over 160 applications have already been built within the Seeker ecosystem.
But can this ecosystem construction truly change the current situation where users buy but do not use? The outcome remains uncertain. However, as the first-generation product in the Solana phone narrative, Saga successfully established a marketing model but also exposed a core issue: Is the core competitiveness of Web3 phones their product attributes or financial attributes? If it is merely a ticket for airdrops, is the heavy operational cost required for it as a phone product truly necessary? If Web3 phones want to remain competitive without relying on airdrop expectations, what should their core selling points be in such a mature phone market?
Currently, the market situation for the second-generation Seeker is much better than that of Saga, but until these key questions are resolved, Saga's fate may still be replayed.
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