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Luxury phones

19/10/08

This season’s handbag has a life of three months. Now I’ll use mine for a fair bit more than that but it cost a fair bit more than a high end phone or a plasma screen.

So the phone business wants in on fashion. This isn’t new. Vertu is a decade old and there have been some interesting attempts. Xelibri?

Still the industry is trying again. Word reaches me of several manufacturers which are looking to fashion. The French manufacturer Modelabs has built a business out of taking cheap and nasty phones from China, sticking on a label which would be more at home in Fenwicks and calling it a style phone. It does nothing for the brand and the sliver paint flakes off inside your jeans.

Expansys HTC Touch Diamond advert

The newer generation of fashion phones need to be something more than any phone with a disconnected brand on the top. One of the top five manufacturers is planning something which will create a new premium brand around an exceptionally nice handset. Let’s hope they manage to distance the new brand from their existing one which has long and very well known history of launching phones at a super high price point and a month later being free with contract. Oh sod it, I’m not going to drop hints any more, it’s Motorola. When Startac came out it was a $3,000 phone. So expensive that the 98g phone sold for more than 98g of gold. They devalued the brand so quickly that the multi-coloured device you see me holding at the top of this page was free with cornflakes. Razr was launched at a $1,000 and almost immediately dropped to 50€ on Orange in France. Free with contract was not far behind.

This time they will be telling themselves it will be different. This new brand will hold its value.

It’s true things are different. But not in a good way. For a start they will have Sagem playing the same premium game. When you are building a new prestige brand from the ground up there is no falling back on history or brand equity, everyone starts from the same place. Motorola does have an exceptionally nice rotator phone to build it with but as Nokia showed with Vertu you need to sink a huge amount of money in over a very long time to build the brand, and Motorola is a company looking for a quick win. Another company jostling for premium handset space isn’t going to help. Motorola needs to think of a range of products over five years to see a return and today’s “make the quarter Moto” can’t think like that.

The other reason things are different now and not in a good way is the general economic downturn. This isn’t the environment in which to be launching more expensive phones when the routes to market all want things to be cheaper.

Cat Keynes publishes her thoughts on the mobile phone industry every Sunday at www.catkeynes.com you can read the column  the previous Friday by subscribing here.


Links

When music came on big round black things there was space on the back of the album cover for lyrics. Now music comes in downloads there isn’t space for anything so it’s good that you can get the lyrics by WAP.

Nokia has seen market share and profits drop. It’s still one of the most profitable companies in the world at over €93,000 a minute but the important message is that they have walked away from price cut business. It’s a message they are telegraphing to other handset manufacturers to say “we’ll hold our prices, you can too”. And it’s not what the carriers want to hear.

If you are European and want to get really angry check out Fierce Wireless’ 25 most powerful people in wireless it’s a roll-call of who has the big budgets in the US, but with India putting on 8 million subscribers a month those networks are far more powerful. Let’s hope they have space for some of the really important people like Anssi Vanjoki, Dick Komiyama and, the most powerful person in the industry Arun Sarin.

I’m not commenting on the Android G1 until I’ve had one, but there is an excellent review on Engadget.

Given how hard it is to get an application up and working on a phone when you are trying I’ve always thought that fears of viruses and hacking were overblown. Still the Georgia Institute of Technology thinks differently.

 

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