http://online.wsj.com/public/article/SB115930210354774666-SInOlGbgyOZD9GDGTqhMtYBIikA_20061004.html?mod=regionallinks
Vodafone Group PLC plans to introduce its first Vodafone-branded consumer
cellphone, highlighting the growing interest among some cellular operators to
reduce their dependence on big-name handset makers.
Vodafone, the world's largest cellphone-service provider by sales, plans to
announce as early as tomorrow a phone aimed at consumers that will carry only
the Vodafone brand. Like other large service-providers in Western Europe and the
U.S., Vodafone typically offers phones bearing the manufacturer's logo as well
as its own.
The new handset, made by Chinese equipment maker Huawei Technologies Co.,
also underscores the rise of a new class of Asian manufacturers and their spread
beyond Asia. Known as white-label manufacturers, the companies make equipment to
be branded by others as well as under their own brands. While carriers in Japan
long have branded their own phones, it is only in the past few years that some
of their Western European and U.S. counterparts have shown interest.
Part of the appeal for Vodafone is price. Jens Schulte-Bockum, group director
of terminals at Vodafone, says the new handset costs about 30% less than the
roughly $285 to $380 the company would expect to pay for a similar phone from a
large equipment maker. Vodafone also can get a customized handset that will give
customers easier access to services such as music and games that Vodafone sells
through its own Internet portal. The new handset, for instance, has a button
that takes customers straight to Vodafone's music services.
Such customized handsets account for a very small portion of the handset
business in Western Europe and the U.S., where customers typically look for the
manufacturer's brand when shopping for handsets. But carriers may use the
handsets as a bargaining chip with their traditional suppliers. They will likely
"use these devices to extract better pricing from the larger handset makers,"
says Hugues de la Vergne, an analyst in Dallas at research firm Gartner Inc.
Vodafone has experimented with a company-branded product targeted at business
users, made by Taiwan's High Tech Computer Corp. Mr.Schulte-Bockum added
Vodafone plans to launch two or more similar phones next year. About 3% to 5% of
the handsets offered by the company would then carry only the carrier's brand.
Cellphone-service providers want consumers to become attached to their
brands, and therefore less likely to switch to another service provider. As part
of that effort, many large providers have invested in building branded Internet
portals where consumers can download music, games and television clips. Such
services have struggled, Nomura analyst Richard Windsor said in a recent
research report. "Operator-branded experiences have largely failed to capture
the imagination of users," he said.
Carrier initiatives to push their own handsets also will struggle unless they
are willing to go further in terms of what services they offer, Mr. Windsor
added in an interview. For instance, providers need to offer a wider Internet
experience rather than effectively restricting access to their own portals as
most still do. Because large service providers work closely with the handset
makers to design how handsets for their network operate, they influence both the
software and hardware that controls how customers use their
phones.