Fashion and Style in the Mobile Handset Industry: Industry Research Report

Fashion and Style in the Mobile Handset Industry

Published Date: June 2005

Published By: ARCchart

Page Count: 150

Order Code: R462-0006

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In developed mobile markets, consumers are becoming more sophisticated in their selection of handset, and this is driving a market for stylish and fashionable mobile phones. In this research report, ARCchart shows that there will be sufficient consumer demand to support the sale of 23 million fashion handsets by 2010.

There was a time when companies such as Nike, New Balance and Reebok produced 'running shoes'. Now these pieces of footwear sell in fashion boutiques, and vintage lines can trade for huge market premiums. The mobile phone is following a similar path, and fashion boutiques have become the point of sale for handsets from Siemens/ESCADA, Nokia/Versace, Vertu and the now defunct Xelibri. In addition, fashion designers such as Kimora Lee Simmons, Diane Von Furstenberg, Anna Sui and Vivienne Westwood have readily extended their design expertise onto handsets from Motorola and Samsung.

A fashion handset is one where the consumer's purchase decision is based primarily on the aesthetics of the device, and the primary conduit for fashion and style into the handset market today are the handset vendors themselves. In an age of standardised handset platforms, it is increasingly difficult for Tier One vendors to differentiate their products by simply adding enhanced technology features. For the consumer faced with a range of seemingly identical devices from a technical perspective, the aesthetics of a device can generate an emotional response to which they will ascribe a value and for which they will pay a premium.

The report examines the fashion and style strategies employed by the major handset vendors in the market today. These strategies fall into four groups, consisting of: the incorporation of fashion and styling elements across a handset portfolio; co-branding collaborations with fashion brands; formation of a handset sub-portfolio geared specifically at the fashion and style conscious market; and the establishment of independent, fashion focused handset subsidiaries. Nokia is the only vendor adopting all four strategies, while Sony Ericsson employs just one.

A detailed analysis of the opportunity for fashion brands to independently produce their own-designed phones, outside of an operator or handset vendor collaboration, is provided. In addition, specific scenarios for entry into the handset market are described for two brand companies, a global Italian fashion house and a British luxury car manufacturer. The scenarios include concept handset designs created by Swedish design firm, Ocean Observations.

This report examines the state of fashion and style in the handset industry, including:

Examination of previous marriages of fashion and technology, including Apple's iPod
Overview of the handset market, examining the platform providers, ODMs, OEMs and the operators
Analysis of the fashion and style strategies currently employed by Tier One handset vendors
Case studies of Xelibri, the Siemens ESCADA venture, Vertu and the Vodafone Ferrari handsets
The opportunities and challenges for operators in distributing fashion and branded handsets
Study of the brand conflict between operator brand, vendor brand and fashion brand
Fashion phones driving the market for multiple handset ownership
Analysis of the handset opportunity for fashion and brand companies
Scenarios of fashion companies entering the handset market, including concept handset designs
Anology between consumer behaviour in the wrist watch and handset market
Forecast of the consumer demand for fashion handsets as the mobile phone market matures

Answers and opinions are provided with respect to the following essential questions:

What are the factors driving fashion onto the mobile handset?
What fashion strategies are helping handset vendors support sales and margins?
Why did Siemens' Xelibri fail and why is Siemens ESCADA more successful?
What are the prospects for Nokia's Vertu?
How can operators benefit from distributing fashion and branded handsets?
What strategy should operators adopt when dealing with fashion handsets?
How will handset subsidies affact the sale of fashion phones
How can the fashion handset GUI drive operator ARPU?
Is there an opportunity for pure fashion companies to independently launch fashion handsets?
What are the benefits and barriers for these companies?
What will be the future consumer demand for fashion phones?