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Product
sameness. Marketing folk know it as the moment a product
becomes a commodity. There's hardly a business that isn’t
facing such a ‘bland image’ problem. Insurance companies,
carbonated drinks, banks, coffee shops, even shopping
malls all worry that their ‘unique’ business can quickly
be copied. In the cell phone market, however, there's hope.
It's got a lot to do
with a flurry of activity around two areas: 'convergence'
and what tech folk call ‘pervasive computing’.
Convergence has had promising results (the fax machine,
for instance was the result of printers converging with
modems) and may not just rescue the phone, but launch an
entirely new category. A phone's guts --its operating
system-- in no longer limiting. In fact, a new breed of
phones are so complex, they may no longer deserve to be
called phones. Tiny phones no larger that a pack of
cigarettes can carry the capacity of small computer. Their
display panel, something phones seldom had as late as in
1999, allows you to input and interact with data. If
playing a game of Tetris, or using voice-activated dialing
seems cool, prepare to be impressed. The cell phone is now
shedding its 'toy' status and turning into a 'tool'. From
a marketing perspective, it’s an open frontier.
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Take convergence.
We were already headed in this direction when the
Personal Digital Assistant (PDA) went wireless. The
ice was broken when the Handspring Visor incorporated
snap-on attachments such as a cellular modem and a
digital camera. The multi-purpose PDA was born.
Cellular companies such as Sprint and Verizon saw the
opening and jumped into bed with the hardware
companies.
These multi-function
PDA's are still several hundred dollars more expensive
than their plain vanilla devices, but as Handspring's
Treo, Palm’s i705, Kyocera’s
SmartPhone and Nokia’s SPH-1300
demonstrate the value of a hybrid device, the prices will
begin to fall and an entire new niche will emerge. |
This was just what
cellular companies needed, struggling to differentiate
themselves in a market that essentially offers similar
national coverage, for the same price plans. If there is
anything that makes them look different it's their face
plates. Big deal! Competing on design has its limitations.
Competing on function, however isn't for the faint of
heart. The market realized this with the entry of
Microsoft, which has shifted its sights from PC's to
Web-enabled mobile devices. It already has alliances with
Orange (a French telecom company), Vodafone, and the
British telephone company MMO2. And it’s not just the
voice market that's attractive; it’s data. Today data
traffic surpasses the volume of voice traffic on major
networks. It is against this backdrop that AT&T launched a
service –actually a company—called MLife. The service is
all about using a phone as something of a portal; a
communications port that frees the individual from a world
of wires and operating systems. Which is what ‘pervasive
computing, or the ability to interact with information
from virtually anywhere, is all about. It's computing
without computers! In this scenario, the phone is a more
versatile animal.
The phone as a tiny
laptop? Look at it this way. The PC market is on a
life-support system. Desktops are too clunky; laptops are
too heavy and expensive. Besides, they are far too
crash-prone --never the problems of cell phones! So the
time is opportune for this phone-meets-PC mentality to tap
a market. Phones and PCs are migrating to a common point
–what men tend to call ‘tools’, and women consider as
‘appliances’. The concept of an ‘appliance’ is
fascinating, if only because it would be idiot-proof. The
phone of the future, if it is to become an appliance,
should not be limited by a service plan. (We don't have
microwave service plans, do we?). With the drop in price
of broadband connections, our phone-meets-PC could be
'always on', streaming music and video from news,
education and entertainment providers. The multimedia
phone is just around the corner. Sharp is about to launch
a phone with a video camera and a Bluetooth-enabled
headset. (And you thought the Sony Vaio
laptop with a built-in camera was a terrific idea!) In
this personal Web space that we access in wireless mode,
we could also store documents, a contact database,
personal information such as our calendar, and a family
album. Multimedia messaging is possible on a Nokia handset
for those who want to swap pictures plus text.
The true test of
acceptance of a product or service is when it becomes
invisible. As our phones continue to shrink in size, and
our bandwidth grows more affordable, networks are poised
to become what electricity is: a utility that we
take for granted. We are seeing early examples of this. At
an enterprise level, IBM is touting e-business on demand
as "the next utility" –no different from how we regard
water, gas and electricity. Amtrak is taking baby steps
towards this ubiquity, by giving commuters access to the
wireless Web on select commuter trains. Several
universities in the U.S. have wireless zones where
students can painlessly get on the Net while seated at a
park bench during class breaks. Starbucks and Seven-Eleven
are experimenting with the same idea. For the moment, we
have to lug around eight-pound laptops with expensive
wireless modems to tap this utility. But the new
'electricity' will find its way to our homes, cars,
schools, restaurants, airports and our public transport
system. At that point, other appliances will arrive to tap
into it. They may look like phones but will be much more
robust and versatile. Look out for a pocket Net device
called ‘Nexio’ from Samsung that will be launched this
year. It is part phone and part Web browser, but with an
MP3 player and camera on board! More will surely follow.
We'll soon need to stop referring to them as ‘phones’ and
give them a different nomenclature entirely. Lap-phones
anyone? |
