Ericsson in the ugly business
By Peter Martin in London
Published: April 23 2001 17:25GMT | Last Updated: April 23 2001 20:19GMT
OK, I'm just going to come right out and say it: Ericsson lost $2.3bn on mobile phone handsets last year because its products are ugly.
We all know it, but are too polite to say so. So instead we talk about poor market segmentation, or excessive costs, or a slow product cycle. All true; but if the handsets had been prettier, these would have been merely glitches.
In one sense, the Ericsson story is a case study of why industrial design matters. But often beautiful products are commercial flops because they are too expensive or lack some mundane, essential feature.
The real implication of the Ericsson story is that mobile phones have joined a surprisingly small category of products, ones with which purchasers identify so completely that they are not prepared to tolerate ugliness. It's a small group: consumers will put up with surprising ugliness in other products, witness the typical personal computer.
The products where appearance counts have two characteristics: we bond with them intimately; and we believe that other people judge us by the models we choose. There are relatively few products in this category: clothes, shoes, cars and - now - mobile phones.
For most of recorded history, clothes and shoes occupied this niche all by themselves. So important was appearance that many countries had sumptuary laws restricting what you could wear. Beauty was for the rich and powerful - everyone else was condemned to ugliness.
Cars joined this elite group in the 1950s. The Ford Edsel reflected Detroit's insight that mass-market cars represented owners' self-image. Alas, the car - and the name - were spectacularly ugly. But 10 years later, the same process produced the Ford Mustang. It looked good, wasn't named after the chairman's dad, and was a smash hit.
The mass-market car's arrival as a visual identifier led to the reappearance of sumptuary laws in big companies. The sales reps had to drive Montegos while the bosses were allowed BMWs or Jaguars. For a while, financial considerations forced most private buyers to put up with econoboxes, ugly cheap cars. But these days most cars are reasonably good looking, at least to the groups they target. And appearance is crucial.
In retrospect, it might seem obvious that mobile phones - a genuinely personal product - were destined to join this group. But that wasn't how they started: they were big, clumsy and functional. Just like portable computers, in fact. And those, Apple's valiant efforts notwithstanding, have stayed ugly. Even laptops and personal digital organisers, which we carry round with us, have avoided the tyranny of beauty.
Why mobile phones have succumbed to this while Palm Pilots have not is a mystery. Perhaps Nokia's consistently good design was a spur. But as other products move out of the econobox era and personal technology proliferates, more products will make a similar switch. For those whose products might fall into this category, there are some lessons from the Ericsson experience.
First of all, obey the logic that has long ruled in clothes and shoes. That doesn't just mean that you have to get a good designer, though Ericsson should certainly have learnt this lesson earlier. (It hired a new high-powered head of industrial design in November and is now talking about a handset deal with Sony, paragons of taste.) But the real secret of the fashion business is that it is prepared to put up with difficult, temperamental, quirky people in the name of style - and ruthlessly dump them if they lose their abili-ty to please a fickle public.
The second rule contradicts the first: beauty isn't enough. Clothes need to fit, wash and wear properly, otherwise there will be no second orders. That's why Nokia makes sure its products don't just look good - they also score highly on the practical things that users really want, such as battery life, light weight and a foolproof interface.
So, you've made your product good looking, it works well, and is reason- ably priced. Will you automatically succeed? No, because you may not be able to make beauty the key differentiator. This is the Apple lesson: its computers have been consistently better looking than its rivals', but since the early 1980s it has been stuck in a niche. For most people, Apple's style just doesn't matter enough.
One other thing: once a product has entered the beauty zone, it may not stay there indefinitely. If technology passes it by, an object that once sold on beauty will lose its mass appeal. Connoisseurs will still buy it but the general public won't. Someday, perhaps, mobile phones will follow fountain pens and mechanical watches down this road. Then Ericsson will have the last laugh.
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