October 9, 2006 4:00 AM PDT
Confessions of a cell phone junkie
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Jeffrey Nelson, a spokesman for Verizon Wireless, said it's disappointing that one of Verizon's customers is unhappy with its phone selection. But he emphasized the wide selection of products Verizon offers.
"If it's an issue for one customer, it's an issue for us," he said. "But we do have the cool stuff. Just look at our lineup. We haven't had any problem selling Razrs and Chocolates."
Still, Nelson insisted Verizon Wireless's priority is the network.
"If you want the coolest phones, but don't have a great network, you might as well go to a toy store and pick up a plastic phone," he said. "Because all you're going to get is a nice-looking accessory anyway."
Analysts agree that network quality is crucial to attracting and retaining customers. But they warn that the networks are becoming indistinguishable, especially in urban areas such as New York, Los Angeles, Boston, San Francisco, Chicago and Dallas, where coverage by all four carriers is already ubiquitous and the quality is similar. As a result carriers need to think of new ways of attracting customers.
"I don't think the network is going to be what differentiates carriers in the future," Barrabee said. "The networks are becoming commodities. And consumers will be looking at other factors in making their decisions."
Consumers have already let it be known that design matters. In mid-2005, when the Razr phone from Motorola was exclusively offered by Cingular, sales of the phone skyrocketed and subscriptions to Cingular's network jumped.
"We learned some important lessons from the introduction of the Razr," said Clay Owens, a spokesman for the company. "First of all, work with enough manufacturers to get the coolest handsets available. Secondly, make sure you have an exclusive--customers know their handsets and will choose their carriers based on 'cool.'"
But sales of the phone continued to soar after it was introduced on T-Mobile's and Verizon Wireless' networks, indicating that consumers were also willing to wait for their provider to get the phone they desired.
At least one new cell phone company, a mobile virtual network operator called Helio, is betting the farm that consumers will switch service providers for cooler phones. The company, which is bankrolled by EarthLink and South Korean operator SK Telecom, markets itself as a hip mobile service for the young, tech-savvy consumer. A big part of Helio's appeal are cutting-edge phones, similar to what's offered in Asia.
The company launched its service earlier this year with two phones: the Hero, which costs $275, and the Kickflip, which sells for $250. Each device features 2.2-inch, color liquid crystal displays, removable memory and a 2-megapixel camera with digital zoom and flash for capturing pictures and video. The Hero also comes with stereo speakers. Because Helio's subscribers are likely to view their phones as accessories, they can also sync their address books over the air to another Helio phone.
"Helio members don't want see their mom or their little brother with the same handset they're using," said Helio spokesman Rick Heineman. "They want something different, something that's designed just for them."
While style, form factor and the overall coolness of a phone are becoming important, most consumers still say the phone is only one aspect that plays into their decision-making process. Papadopoulos, for example, said he'd consider getting Apple Computer's iPod phone if it finally comes out and if it's offered on Verizon Wireless, Cingular or T-Mobile's network. But he stops short of subscribing to Helio just for the phones.
"Cool phones are one thing," he said. "But you need to balance that with a good network. And I know the Helio service uses Sprint's network. And I really don't like Sprint."
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