Skip to main content

Designer Brand Mobile Phones Add Profit

Ready for your designer handset? Dior recently introduced its own line of in-house designed mobile phones. Other prestige brands are also adding cellular handsets to their product lines.

As personal items used frequently in public, mobile handsets can take on a powerful symbolism, representing the user's social status and personality. In partnership with handset manufacturers and vendors, luxury brands are starting to carve out a distinct niche within the cellular handset industry.

ABI Research forecasts that revenues from luxury branded handsets will exceed $11 billion next year, increasing to more than $43 billion in 2013.

Research director Kevin Burden comments, "For luxury goods producers, mobile phones are a logical addition to their basic product portfolios of jewelry, watches, and other fashion accessories. From the perspective of handset manufacturers, a luxury mobile phone does not simply mean a new handset model, it represents a meaningful strategic approach to increased brand equity."

Given the heated price competition in handset markets, vendors have struggled to deal with low margins. Cost-cutting alone is to some extent seen as of questionable effectiveness as a way around this impasse.

Given the competitive environment in the handset market, manufacturers are looking for ways to differentiate their intangible assets -- premium value and brand power.

Since a handset comprises a mass of technological attributes, its market value is basically determined by all of the components and labor, and its technological performance.

This is not likely to change. But consumers are also very aware of brand image and premium value. This gives manufacturers additional leverage in securing customer loyalty, and increasingly forms part of vendor's long-term strategies for growth.

Popular posts from this blog

Decoding the Generative AI Global Surge

Commercial interest in Generative AI (GenAI) tools has reached a fever pitch, and the latest forecast from Gartner amplifies this emerging trend. Gartner predicts $644 billion in worldwide spending on GenAI in 2025, marking a dramatic 76.4 percent increase from the previous year. This surge underscores the impact GenAI will have across industries. It also requires a closer examination of the underlying dynamics of future potential. Generative AI Market Development This growth is fueled by the GenAI foundational model providers who invest billions into enhancing the size, performance, and reliability of their models.  Hardware also accounts for a significant portion of this spending, with ~80 percent allocated to servers, smartphones, and PCs equipped with artificial intelligence capabilities. This highlights the critical need for computational power to support the demanding workloads of GenAI. However, Gartner also injects a dose of reality into the GenAI hype cycle. There's a dec...