No sooner do Motorola, Nokia, Samsung and other traditional cell phone product makers start to feel comfortable that the battle lines have been drawn for wireless handset share, then in marches HMS from Taiwan and Videocon from India.
Who?
It seems that the big consulting firms’ prevailing strategic recommendations to wireless handset makers is to give in to the growing demands of mega-carriers for exclusive, essentially private label handset products. Ugh!
If only these telecom pundits would look at how private label strategies have played out over the past decade in consumer packaged goods. In those markets, much touted short-term, early gross margin gains at retailers pursuing private label and overseas sourcing strategies have more often than not resulted in yawn-inspiring product selections, back-office retail cost nightmares, atrophied promotional expenditures, declining ‘net’ margins for everyone in the system, and commoditizing retail environments and customer experiences. It seems that there is a point in a ‘stripped bare supply chain’ environments when consumers balk, and make it clear they care about more than lowest price.
In the same vein, what would best serve the interests of wireless consumers and product makers is a robust, competitive handset selection and marketplace. New features. New capabilities. New styles. The stuff that Apple’s so good at. What RIM has been doing with the Blackberry. What’s not likely to win any excitement awards are constrained, sub-scale efforts by network and infrastructure bureaucrats to control consumer fashion decisions. Do we really think an AT&T network manager is going to design, let alone launch successfully, the iPhone?
In the spirit of full disclosure, you might find it relevant that I’ve been accused by a wireless network executive as having a “handset bias”. The accusation emerged during lively strategy debates about the best way to gain share in the heated marketplace battles for the heart, mind – and wallets – of end wireless consumers. Maybe I do, but ask anyone under 40 years old what drives their wireless decisions.
Nonetheless, new overseas entrants such as HMS (started as recently as 2002 as a contract manufacturer for Palm, Dell and HP) and Videocon are announcing plans to heat up the battle, with strategies aimed at out-commoditizing the commoditizers. By shifting handset competition to look more like any global private label business. What Nokia, Blackberry, and Motorola – if it remains an independent branded product maker – should do is resist this temptation with every fiber of their strategic being. It’s a sure path to ruinous commoditization for branded players.
Wireless carriers are handset channels – not handset customers. The end consumer should be the focus. Only be allowing new commodity supply chain players to redefine the playing field will branded product makers lose the battle. Will they methodically keep the marketplace focused on national, multi-channel brands and increasing consumer excitement? Will they rise to the branded player’s challenge?
Who?
It seems that the big consulting firms’ prevailing strategic recommendations to wireless handset makers is to give in to the growing demands of mega-carriers for exclusive, essentially private label handset products. Ugh!
If only these telecom pundits would look at how private label strategies have played out over the past decade in consumer packaged goods. In those markets, much touted short-term, early gross margin gains at retailers pursuing private label and overseas sourcing strategies have more often than not resulted in yawn-inspiring product selections, back-office retail cost nightmares, atrophied promotional expenditures, declining ‘net’ margins for everyone in the system, and commoditizing retail environments and customer experiences. It seems that there is a point in a ‘stripped bare supply chain’ environments when consumers balk, and make it clear they care about more than lowest price.
In the same vein, what would best serve the interests of wireless consumers and product makers is a robust, competitive handset selection and marketplace. New features. New capabilities. New styles. The stuff that Apple’s so good at. What RIM has been doing with the Blackberry. What’s not likely to win any excitement awards are constrained, sub-scale efforts by network and infrastructure bureaucrats to control consumer fashion decisions. Do we really think an AT&T network manager is going to design, let alone launch successfully, the iPhone?
In the spirit of full disclosure, you might find it relevant that I’ve been accused by a wireless network executive as having a “handset bias”. The accusation emerged during lively strategy debates about the best way to gain share in the heated marketplace battles for the heart, mind – and wallets – of end wireless consumers. Maybe I do, but ask anyone under 40 years old what drives their wireless decisions.
Nonetheless, new overseas entrants such as HMS (started as recently as 2002 as a contract manufacturer for Palm, Dell and HP) and Videocon are announcing plans to heat up the battle, with strategies aimed at out-commoditizing the commoditizers. By shifting handset competition to look more like any global private label business. What Nokia, Blackberry, and Motorola – if it remains an independent branded product maker – should do is resist this temptation with every fiber of their strategic being. It’s a sure path to ruinous commoditization for branded players.
Wireless carriers are handset channels – not handset customers. The end consumer should be the focus. Only be allowing new commodity supply chain players to redefine the playing field will branded product makers lose the battle. Will they methodically keep the marketplace focused on national, multi-channel brands and increasing consumer excitement? Will they rise to the branded player’s challenge?
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