Slim, shiny, clever devices dazzle and delight-impressions that all the major handset makers are capable of producing in a mobile phone. As carriers manage their handset portfolios, they see in those devices the means to capture the imagination of consumers and draw them into a tight, profitable embrace.
Whether a device will succeed in that endeavor depends on myriad factors, too numerous to enumerate-though from the consumer’s viewpoint, the device’s primary functionality, usability and price certainly loom large. The factors that figure into a successful handset have been studied, parsed and market-tested, so when carrier and vendor launch a new model, they have good reason to believe in its potential. Analysts, of course, are equally adept at detecting possible clouds in that silver lining.
Samsung Electronics Co. Ltd.’s new SCH-u740 at Verizon Wireless is a case in point. Talking to the carrier, the vendor and an analyst is akin to looking at a handset in one of those 360-degree product presentations on the Web-except those conversations provide a 360-degree view of the handset’s business prospects. All these sources combine concern for the end-user’s lifestyle, needs and desires-and pocketbook-with a sense of how the device can meet them. That’s where viewpoints tend to diverge.
The u740 is a slim, dual-hinge flip phone that presents messaging as its primary function. Yet, like many devices, this one also packs in multimedia functions and a camera/camcorder as well. When flipped open and held vertically, the u740 offers a 12-key alphanumeric keypad. Flipped open horizontally, the device offers a QWERTY keyboard and a landscape screen. It offers Verizon Wireless’ Vcast music and video services, the carrier’s Get It Now store and its Web 2.0, for personalized Web access. And it provides instant messaging (using AIM, MSN and Yahoo), text, picture and video messaging and e-mail using Verizon Wireless’ Synch. (See box for more specs.) The device currently sells online for $150 with two-year contract.
Messaging madness
Messaging in general and texting in particular is rampant among the 15-25 year-old demographic, which is the u740’s target market, according to Verizon Wireless spokeswoman Brenda Raney. And that demographic is driving a good deal of the messaging boom. In the fourth quarter of 2005, for instance, Verizon Wireless’ wireless customers sent 7.4 billion text messages. In the fourth quarter of 2006 that figure grew to 17.7 billion messages.
“Text messaging is here to stay,” Raney said. “So consumers need a device that allows quick and convenient messaging.”
Those at the younger end of the target demographic easily text with a 12-key, while desire to text or e-mail with a QWERTY keyboard rises with age, according to Raney. The Samsung u740 should appeal to both ends of the spectrum, particularly in a slim, flip form factor, she said. The $150 price may well be split between parent and teen; parents increasingly find that text messaging serves as an “invisible tether” to their children, Raney said. Also, Verizon Wireless offers a credit toward a replacement handset when a contract is up for renewal, mitigating the relatively high price of the u740. (Another messaging phone with QWERTY keyboard in the Verizon Wireless lineup is LG Electronics Co. Ltd.’s enV, at $200.)
“The u740 offers one-button access to messaging for people who look for that as their primary requirement,” Raney said. “Even business people need text messaging as a discreet means of communication.”
Dual-focused design
Muzib Khan, a Samsung vice president for product management and engineering, said that as Samsung explored how to provide consumers with options for popular functions such as text messaging, it developed the dual-orientation approach embodied in the u740.
“We looked at what regular phones can do and what they can’t do,” Khan said. “Text messaging is best done in a screen’s landscape mode, so we looked at how to accommodate that.”
The u740 is Samsung’s second handset model with a dual-hinge, which he said was engineered to withstand “use and abuse.” The QWERTY keyboard is superior to triple-tap methods of input on a 12-key device, he said.
“We want people to feel that this is a slim clamshell phone, but with a ‘texting’ option that offers the best of both worlds,” Khan said. “Verizon, like other carriers, recognizes the need to grow data revenue, particularly in messaging and multimedia. To support their messaging initiative, we offered the u740. I think it will be an interesting phone to watch (on the market).”
Tarnish on silver lining
Avi Greengart, handset analyst at Current Analysis, has used the device and has compliments, caveats and questions.
“Samsung certainly got the form factor right,” Greengart said. “It’s attractively thin. The screen is wonderfully sharp. The phone’s full functionality is available in either vertical or horizontal orientation, which makes for a nice Vcast video experience and enhances the usability of VZ Navigator.”
Unfortunately, the analyst said, he found the keys in the vertical mode “easy to locate, but rather small and hard to read.” The QWERTY keyboard works well, but in landscape mode, the arrangement of soft keys no longer correspond to on-screen labels. Typing numbers for text message addresses is “next to impossible.” The instant messaging application is buried in a scroll-down menu. But as an e-mail device, the u740 is “a reasonable solution.”
“By pushing messaging to the fore, both Samsung and Verizon are on the right track with a revenue-producing function,” the analyst said. “This is a positive development. But the pricing has me scratching my head. If you’re putting in a QWERTY keyboard to attract an audience that generates messaging revenues, wouldn’t it make sense to subsidize the device more to get its price down and get it into the hands of consumers?”
In the context of Samsung’s portfolio at Verizon Wireless, Greengart said that the Samsung a930, selling at Verizon for $40 online (with contract), offers a similar feature set, except for the dual-hinge design and QWERTY keyboard. That in effect requires consumers to pay more than a $100 premium for the u740.
“Once you’re over $100 at Verizon, you’re competing with true smartphones like the Motorola Q,” the analyst said. “Shouldn’t the pricing of devices that increase messaging revenue be more heavily subsidized?”
