February 29, 2008
Hoping to Make Phone Buyers Flip
Hoping to Make Phone Buyers Flip
These days, designing a new mobile phone can seem like something out of an episode of “Dr. Phil.”
LG Electronics, the maker of the Chocolate and Voyager phones,
begins by asking focus groups to keep a journal, jotting down feelings
about features they like most. Participants can call a toll-free number
to share their emotions about the phone they are testing. And sometimes
they are asked to draw pictures that represent their mood when they
hold the phone.
“Our job is to be behaviorists and psychologists,” said Ehtisham
Rabbani, LG’s vice president for product strategy and marketing. “We
constantly have to be reminding ourselves that we tend to be geek types
and our customers are not.”
Executives and industry analysts say it has become more important
than ever to understand the psyche of consumers and why they pick one
phone over another. That’s because LG, Motorola, Nokia and others are in a fierce battle to please finicky customers as new entrants like Apple, with its popular iPhone, seek to upend the traditional mobile phone business.
At stake are millions of dollars in profits and the fortunes of
entire companies. Like fashion or entertainment, the cellphone industry
is increasingly hit-driven, and new models that do not fly off the
shelves within weeks of their debut are considered duds. The most
gadget-conscious shoppers buy new phones every nine months, twice as
fast as they did a few years ago. And teenagers, one of the
fastest-growing markets, are especially quick to dump a brand if it
loses popular appeal.
“The world has changed,” said Jeremy Dale, who is in charge of
marketing for mobile devices at Motorola, where fortunes tumbled with
the decline of its once popular Razr. “There is more relevance in what
other consumers say than what the company is saying.”
Cellphone company executives are so concerned about these trends
that, at the largest mobile phone trade show in Barcelona this month,
panelists debated how their industry could better understand how to
make customers happy, as Apple seems to do. One panelist suggested that
cellphone makers tap into consumers’ “neural networks”, while another
said they should understand their subliminal needs.
The speed of innovation — or rather, consumers’ appetite for it —
makes it harder for companies to compete. Ten years ago, wireless
carriers and mobile phone makers could thrive by offering consumers two
or three new options a year. But now, with nearly 80 percent of
Americans owning a mobile phone and hundreds of models available, a
company’s fate can turn as quickly as a teenage girl’s temperament.
Mr. Dale says companies like his are forced to give consumers what
they want even before they know they want it. Motorola was a market
leader in late 2004 when it introduced the ultraslim Razr. But when the
company failed to create a worthy successor, its stock plummeted and
Motorola’s share of handset sales in the United States dropped to 30
percent by the fourth quarter of 2007, from 35 percent in the first
quarter, according to the NPD Group, which tracks sales. Now Motorola
is considering a breakup of the company.
Different companies, of course, take different approaches to
understanding consumer tastes. Along with extensive focus-group
testing, LG executives regularly attend home and design shows looking
for broader trends in popular culture.
Mr. Rabbani said that last year he and his colleagues noticed that
natural materials like wood, metal and leather were popular among
furniture and appliance makers. So when designing the Venus, which LG
introduced in late 2007, designers molded the plastic back to give it
the texture of grainy leather. Verizon and LG declined to give sales figures for the phone.
But whatever the cultural inspiration, if a new phone does not catch
on quickly, it is not likely to catch on at all. Even interesting
designs do not necessarily spell success. Helio, a joint venture of EarthLink
and SK Telecom of South Korea that developed the Ocean and other phones
for the youth market, is reported to be looking for a buyer for its
“The strongest marketing tool is the first 20,000 people who buy the
device,” Mr. Dale of Motorola said. “If they like it, they will tell
The focus on the consumer mindset can be intense. Three weeks ago, a
small team of Nokia executives had their first gathering at a farmhouse
30 miles north of Santa Barbara, Calif., for a three-day retreat to
discuss consumer behavior.
The group is the first of its kind at Nokia, the world’s No. 1
seller of mobile phones, bringing together 14 designers and researchers
from California and Helsinki, where the company is headquartered. Their
charge is to tell Nokia’s top executives not only what consumers will
want next year, but 3 to 15 years from now.
“We have the ability to clarify the needs of real people,” said Rhys Newman, who heads the team.
A case in point: A few years ago one of Nokia’s designers visited
China and noticed that people there used the light from their mobile
phone screens to illuminate dark hallways so they could more easily
unlock their doors. After he discussed his observation with other Nokia
designers, Nokia added a penlight to some models.
“Design used to be inconsequential: just make it pretty, make it
sell,” said Mr. Newman, who, along with three members of his team, was
interviewed at Nokia’s design center near a strip mall in downtown
Calabasas, south of Los Angeles. Now, he said, “we have to think about
Two and a half years ago, Nokia executives asked Mr. Newman and some
colleagues to explore what Nokia’s strategy should be as consumers
began to personalize their cellphones. Among those working on the
project were Jan Chipchase, a human behavior researcher for Nokia who
lives in Tokyo and travels the world studying culture and
communication, and Andrew Gartrell, a 14-year veteran designer.
On a trip to Ghana last year, a colleague of Mr. Chipchase took a
photograph of the crushed front panel of a Nokia 1100 mobile phone that
had been discarded in the middle of a dusty road.
Mr. Gartrell, who had helped design the 1100, was unnerved by the
image; the phone had just come out in 2003. Mr. Newman said Nokia’s
designers and researchers became fixated on the notion that the company
makes 16 mobile phones a second and that many of them end up in the
So instead of examining the personalization of phones, Mr. Newman
and his fellow designers suggested that Nokia explore how to make more
environmentally sound products — or, as Mr. Gartrell put it, “How do we
turn waste into something beautiful?”
AT&T’s proposed filtering policy is bad news
Why should we have to choose between blazing-fast Internet and privacy?
By Helen A.S. Popkin
updated 6:16 a.m. PT, Fri., Jan. 25, 2008
Joel Johnson, gadgets editor for the tech/science site boing boing, pulled a Harvey Pekar during his recent guest appearance on the online AT&T Tech Channel’s “Hugh Thompson Show.”
In 1988, Pekar, the “American Splendor” comic book writer, torpedoed his eighth (and final) appearance on NBC’s “Late Night with David Letterman” by criticizing General Electric (NBC’s parent company), for manufacturing weapons.
Johnson, exhibiting a politeness foreign to the notoriously-cranky Pekar, nonetheless used his guest shot on Thompson’s show to call attention to AT&T’s newly proposed (and very creepy) plan to filter user activity on the Internet.
“Do you guys want AT&T to read your e-mails?” Johnson asked the Thompson audience, when he should’ve been talking about gadgets. “Do you want AT&T to like, open up your instant message conversation and look and see if you maybe said something that they didn’t like or maybe the government didn’t like? Yeah? No. I don’t think anybody wants that.” A chorus of “Noooos!” echoed from the audience before producers shut him down.
Like Pekar’s final “Letterman,” the “Thompson” segment may never air. Johnson however, had the forethought to ask a colleague to video record his segment. He’s posted it on boing boing, along with a note describing the in-studio dust-up he caused and the importance of calling out AT&T. Go see it. You need to. This AT&T thing is a tiny story now, but it’s about to blow up huger and uglier than that Facebook’s Beacon mishagos. And it’s going to affect all of us.
AT&T’s big plan, which CEO Randall Stephenson shared this week at the World Economic Forum in Switzerland, is to monitor traffic over its online network in what he claims is an effort to stamp out theft of copyrighted material. He failed to mention that such a plan is also unethical, impractical, insane, and given the CEO’s explanation, probably more than a little dishonest.
“It’s like being in a store and watching someone steal a DVD,” CEO Stephenson said in his announcement. “Do you act?” Um, well … no. Not most people. Not unless you’re Tom Cruise or the store security guard who’s paid to interact with criminals. Not that the comparison is relevant to the proposal. Most likely, it has little or nothing to do with petty theft. Riddle me that.
When a business entity decides to do something that seems just stupid, you’ve got to start looking for the angle you’re missing. Internet filtering is a bad business move because, well, most of us value our privacy.
We’ve also grown pretty fond of the freedom to explore cyberspace at a speed faster than dial-up. Taking time to scan every e-mail or forwarded LOLcat is going to slow things down considerably. Scanning also runs the risk of blocking perfectly legal content, such as home videos mistaken as, say, “Cloverfield” bootlegs.
Lack of privacy plus a bad connection divided by blocked service equals dissatisfied customers. These customers then dump AT&T en masse, leaving dissatisfied stockholders in their wake. With stakes this high, it ain’t about shoplifting.
Most likely, the purloined DVD comparison is a poorly thought-out distraction from the actual goal — driving a wedge in Net Neutrality. That’s the principle that allows you to surf the Net freely, without Internet providers “speeding up or slowing down Web content based on its source, ownership or destination,” as explained on SaveTheInternet.com.
Without Net Neutrality, Internet providers such as AT&T, as well as Comcast, Time Warner and Verizon, can “discriminate in favor of their own search engines, Internet phone services, and streaming video while slowing down or blocking their competitors,” the activist site points out.
Think of it as an invisible fence preventing you from leaving the front yard, while locking out smaller Web sites who aren’t allowed to visit you on account of they can’t pony up the dues. You get a pretty good picture of why cable and phone company lobbyists are pushing to block Net Neutrality legislation.
As this story balloons over the coming weeks, perhaps AT&T’s true motivation will be revealed. Maybe it’s not about controlling the Internet. Maybe AT&T is using this as a pump-fake to get out of the iPhone contract with Apple. One thing’s for sure. Someone at AT&T needs an intro course on the fundamentals of the practical side of business ethics.
© 2008 MSNBC Interactive