I ‘ve spent most of my time in the last three months researching and authoring a report on the future of handset customisation. I believe that in 2008, hundreds of consumer brands will be commercialising mobile handsets, in a trend started by Bang & Olufsen’s Serene, ELLE’s Glamphone, Elite Model Look’s EML1 and Dmobo’s Disney-themed handset. There are far too many boring grey- and black- coloured handsets out there with the same-old designs and form factors. At the same time, operator and manufacturer brands are too coarse and rarely communicate values which are relevant to the user. There is a clear demand for handsets branded and designed to appeal to different consumer groups, while at the same time manufacturers are desperately trying to produce handsets where the brand value can command a significant delta on the retail price.
Overcoming challenges for unique handset designs
In order for supply to meet the demand for branded or uniquely customised handsets, there are several economic challenges, most of which are being overcome.
- The cost and time-to-market of producing made-to-order handsets (with moderate modifications to software and plastics) is very reasonable thanks to customised design manufacturers like Modelabs.
- Hardware reference designs are shrinking in size (see NewGen’s square phones for example) which frees up the industrial designer’s imagination to go create. There is no shortage of creativity and concepts today from industrial design houses like Idem, Ocean Observations, Frog, Product Visionaires, No Picnic, Alloy and IDEO.
- Distributors are getting into the handset customisation game (see Dangaard’s business of customising Qtek-brand handsets), and customised design manufacturers are getting into the distribution game (see Modelabs’ and Emblaze Mobile‘s acquisitions of distributor businesses).
However, there is still a significant barrier to the proliferation of handsets with unique industrial designs (that appeal to the heart and the wallet of the niche segments to whom they are targeted).
The supply chain issue
If we are going to see tens or hundreds of consumer brands like Nike, Gucci, MTV and Google release their own handsets to the market, someone will have to stock these handsets and have a brilliantly effective system for managing these stocks. In other words, we need to see the Zara equivalent of the mobile handset customiser and distributor – Zara’s success is in most part owning to their just-in-time clothes customisation business and lean supply chain management.
In plain English, this means that the distributor should be able to take the unsold stock of 10,000 Barbie handsets, change the plastics/enclosure to a Gucci handset, repackage the contents and shift the boxes from Malaysia to the UK.
Vertu’s circa $50 hardware BOM is a testament to the power of the plastics and enclosure and the commodity of the hardware. To accomplish this just-in-time customisation we need two things:
- One-size-fits-all hardware reference platforms. With the component size reducing and the form factor volume reducing to 3x3cm PCBs, I don’t see this as being an issue. Add a customisable software stacks from Purple Labs, a la Mobile, or the Digital Airways + SKY MobileMedia + Montavista partnership and you’re there. Add a firmware OTA platform from Red Bend, Innopath or Bitfone (or OMSI‘s firmware over-the-wire platform) and you can customise the software at any stage in the distribution channel.
- Industrial Design Platforms. This is the three-word answer to the problem of snapping off the Barbie enclosure and snapping on the Gucci enclosure (and it’s not as easy as it sounds).
Calling for the Industrial Design Platform
To date, ID houses have worked off assumptions of the volume metrics of the hardware reference design of the handsets (and in a several cases, the ID and the hardware reference design have been created through iterative revisions). I believe what we need is a new paradigm of the industrial design platform (IDP), i.e. a physical plastics arrangement that can act as the smallest-volume common denominator for a range of industrial designs, that wraps around given hardware reference platforms. IDPs should be designed for certain classes of form factors (for example a lipstick-type factor, a thin flip phone or a square single-body factor) and allow reliable and safe modding of the entire handset enclosure. On top of the IDP, enclosures can be as sophisticated from Voce’s leather RAZRs to a Replay-jeans-moulded handset (as e.g. made possible by Inclosia technology), to cheap plastic Barbie enclosures.
UI Customisation platforms: the perfect partner
UI customisation platforms such as TAT, MSX, Digital Airways, e-SIM (and in the future Flash) are the perfect partner for industrial design houses, as well as the IDP model. This is for three reasons:
- UI customisation platforms make money through handset royalties – the nicer a handset looks the more money they make (and ID houses sure know how to make a handset look nice)
- ID houses need flexible UIs to work with. Ocean Observations’ Sofia Svantesson calls this an elastic UI. UI customisation platforms can deliver this elasticity to mass-market handsets and across the entire breadth and depth of the user journey, from start-up to shut-down
- The ID needs to be coordinated with the UI of the handset. Bang & Olufsen’s Serene is the perfect example. An IDP should therefore be matched with a UI customisation platform; you snap on the enclosure, you update the software UI, and voila, you have a totally different handset in your hands. Wildseed’s Smartskin tried to execute this very concept in 2004, but they were too early to market.
Lesson for industrial design houses: Invest in building IDPs. This offers a clear differentiation to your competitors, reduces time-to-market and cost for handset variants, and improves your attractiveness as a valued partner for your customers (both tier-1 and tier-2 OEMs, customised handsets manufacturers, and value-added distributors).
Go forth and multiply.