2 thoughts on “Mobile mergers: Why they are bad for handset makers?”

  1. Hi Om,

    Interesting article, something that may put a bit of spin on things is the European experience. Nokia is being frozen out of contracts by 3 (my useless contract provider) and Vodafone (the Microsoft of cell phone companies). The reason for this was that Nokia has become such a large brand in its own right, way bigger than the utility style cell phone company. People in the UK don’t ask what network are you on, they are more bothered about what type of Nokia you have.

    Vodafone sees Club Nokia and future projects as direct competition to them increasing ARPU (average revenue per user). The company is trying to establish a uniform user experience across all phones. Unfortunately its pig ugly.

    Not all is bright in the carrier garden however as 3 has managed to prove that closed wall added value services just dont work and is blazing money in a fashion that I thought had already gone out of style in the naughties.

    It wil be content providers not phone companies that benefit despite 3 and Vodafone’s efforts, big winners will be people like MTV and Endemol who are reaching out to meet the challenges presented. This will break the back of power that carriers currently have and lower their sights in promoting their brand and experience relegating them to their true status of being a utility company like water or gas suppliers.

    In addition to this companies are starting to push back against gimmicky work phones and services such as cameras, SMS and video.

    I would imagine many smaller brands in the cell phone market like Kyrocera will suffer because they do not have a ‘global portfolio’ of markets to fall back on. LG and Samsung will do well because of the experience and distribution channels they can draw on across their conglomerate, though they will have to improve build quality and design to improve the tactile qualities of their phones.

  2. By far the best example of this trend is the “Beckham Phone”. Absolutely brilliant branding campaign for Vodofone Live!

    There’s David Beckham using his snazzy (yet nonname) camera phone to snap pics of the clear blue sky on the patio of a sun drenched Spanish condo he is thinking of buying. He sends the pictures on to two of his former Manchester United teammates who at that very moment are sitting huddled in a tent during yet another dreary grey rain soaked practice in England. A perfect blend of educating the public about the usage scenerio, selling the Vodafone Live! brand, and neatly supressing any hint of handset branding.

    There is a new version of this ad involving Beckham sending a short video clip of some everyday items around his house. Each item has a little yellow sticky afixed to it with the Spanish name written on it.

    [For my US mates out there, the back story: David Beckham is footballs equivalent to Michael Jordan, The Pope, and Mother Terresa all rolled into one. His transfer last summer from England’s Man U. to Spain’s Real Madrid was a planet realigning event. If you want to see why football is called the beautiful game, you only need to watch one team play: Real Madrid].

    Douglass Turner
    voice/sms: +354 895 5077

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