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Meet the Company That Could Win the Unlocked-Phone War

Unlocked phones aren’t just for geeks anymore. They’re for anyone who wants to save serious cash versus Apple’s and Samsung’s premium flagships, while still getting good features for the money. Or at least that's the message from unlocked phone makers. Alcatel is leading that charge with its $249 Onetouch Idol 3 phone, which has garnered critical praise (including our own review). However, despite being the No. 5 smartphone maker in the United States, the Chinese company is far from a household name.

We sat down with Steve Cistulli, Alcatel’s senior VP in North America, to talk about how the company is raising awareness both for itself and the unlocked-phone trend, thanks in part to a new commercial (see below). In fact, Cistulli claims that Alcatel has the best combination of three factors among its foes: developing new products quickly, selling via a variety of retail channels and delivering quality customer service.

Cistulli also shared some details about new products and improvements on the horizon, as well as Alcatel's wearable plans, which include an Android Wear watch by 2016.

Editors' Note: Answers below have been edited for length.  

Tom's Guide: There are a lot of players in the unlocked-phone space, such as OnePlus, Asus and Motorola. How does Alcatel stand out against all these other brands?

Steve Cistulli: In the unlocked market, you first have to be able to deliver high-quality products with outstanding specifications at price points that are now driven by people like us and coming in at the sub-$299 category. Then, you have to get your product development life cycle to be very quick. How you are developing these products and the type of products you are developing need to be done in a more rapid fashion than how you would see it traditionally done in a carrier channel. 

MORE: What Are No-Contract Phones?

The clear differentiation that Alcatel has from a global point of view is that we not only know how to do carrier-grade products, we know how to do them in a rapid fashion, bringing them into the United States, having distribution channels across national retail.

TG: So who do you see as your major competitors?

Cistulli: In the unlocked space, I think there is healthy competition today, but I think there are a few that will survive. The ones that will survive will be the ones who get product development life cycle under control, have the proper distribution and relationships for the unlocked channel and have great customer care that knows how to work with direct-to-consumer now. The people I've seen be successful to this date have been Motorola and the Nokia-based products that are out there today in the unlocked space. The rest are "Others" that are coming into the space today and do not have all three of those key factors.

TG: How did you keep the price low for the Idol 3? What trade-offs did you have to make?

Cistulli: We started from scratch with, "How do you design a cost-efficient product with great technology?" In other cases, you'll see companies with very expensive products try to re-engineer them. That within itself leads to inefficiencies. We start with a vision of low cost, so our end goal is always going to be a cost-efficient product. That's number one.

The second part is probably the hardest to do for many companies, but I think it's one of the things Alcatel does very well globally, and that's have a very efficient operation.

TG: So it's not that you've used cheaper materials, it's that your process may be simpler or you have fewer middlemen?

Cistulli: On both of those accounts you are correct. Idol 3 was really meant to drive that point home. This is a Qualcomm processor, these are JBL speakers.

TG: Do you think that flagship phones like the Galaxy S6 are overpriced compared to what you offer?

Cistulli: Yes, I do. From an end consumer's point of view, I do think they are overpriced.

TG: Do you see yourself competing with Samsung?

Cistulli: No, we do not. We've never made any comparison to the Galaxy S series. I'll let those companies speak for their efficiencies or inefficiencies, but if you try to take a product like the S6 and say, "Look, let's try to get cost out of this product so that we can sell it at a reasonable price point," from an engineering point of view that's almost impossible to do.

TG: The reaction to your Onetouch Watch has been mixed. Do you agree with the criticism, and do you think you can stand out versus Android Wear, Pebble and the Apple Watch?

Cistulli: When we created the watch, it was designed to have a simplified end-user experience and look good at the same time. Without a question, I think we met those objectives.

If we talk about some of the feedback that says we don't go all the way with iOS, again, it was designed for simplicity. We have engaged with the support for iOS to the maximum level that we are able to. I think we've done really the best we can to service both Android and iOS users ultimately.

MORE: Alcatel Onetouch Watch Review - Cheap But Limited

Having said that, in the future, we would never steer away from Android Wear. I'm confident that in the next year or so, we will be introducing wearable technology based on Android Wear as well as other operating systems. As long as we can create a product at a very good price point, that is attractive, and can interoperate with the phone, then we will continue to make those products.

TG: Are you already in talks with Google for Android Wear?

Cistulli: You do have to talk to Google. Really, all I can tell you is that we love working with these guys, and I would not be surprised if Android Wear was on the horizon for us in the next 12 to 18 months.

TG: What else can we expect from Alcatel in 2015-16?

Cistulli: There are a lot of surprises coming for Idol 3. I think you'll be pleasantly surprised at some of the updates and derivations to Idol 3 by the end of the year. As we move into 2016, our ability to put even more and newer configurations in our online channel, aside from Idol, is something that's very exciting for the industry to watch.

Cherlynn Low is a Staff Writer at Tom's Guide. When she's not writing about wearables, cameras and smartphones, she's devouring old episodes of Torchwood or The X-Files. Or taking selfies. Follow Cherlynn @cherlynnlow. Follow Tom's Guide at @tomsguide and on Facebook.