High Concept: This Phone's for You
For the first time, sales of wireless devices declined in 2001 despite all the hype and investment in the industry. The drop-off left many people shaking their heads, not least because one of the few healthy and profitable segments of the business was decidedly low-tech. Worldwide sales of faceplates -- pieces of hard plastic that snap onto the front of cell phones -- climbed to roughly $1.7 billion. While interest in the wireless Web is spotty, a simple fashion accessory that costs next to nothing to make is selling for as much as $25. Its success has led Seattle-area start-up Wildseed to develop a "smart" faceplate that can customize a phone's internal systems as well as its appearance.
The idea dates back to May 2000, when a group of Microsoft millionaires asked fellow Redmond alumnus G. Eric Engstrom to look for ways to sell wireless services to teenagers. After four months of research, Engstrom's team decided to redesign cell-phone handsets and to create compatible taco-shaped faceplates dubbed "smart skins." Each skin has a teen-oriented theme; the company plans skins featuring U.K. soccer players (we love Michael Owen), musicians, and movie stars. Once a skin snaps into place, software on a chip embedded in the plastic customizes the phone's ring tones, the screen interface, and the bookmarks on the wireless browser.
Amid the static of the wireless market, ex-Microsoft execs offer teenagers a clear pitch.
If the skins take off, Engstrom believes they will transform the wireless industry. Since they streamline the downloading process, they will drive more users onto the wireless Web, he claims. He also hopes that the skins will help service providers reduce costly subscriber churn. Today a customer who trades in an old phone often selects a new service plan; smart skins provide customers with a way of upgrading a phone without being tempted to buy a newer model.
The idea that cheap pieces of plastic are poised to drive sweeping changes in a sophisticated industry may seem unlikely, but it fits into a familiar pattern, according to Harvard Business School professor Clayton Christensen, author of the groundbreaking 1997 book The Innovator's Dilemma. Oftentimes, new technology emerges at the low end of the market in the form of a simple, seemingly trivial invention, Christensen says. One of his favorite examples is the transistor pocket radio. Made popular by Elvis-loving teens in the 1950s, it seemed more like a toy than a serious product. But because it was cheap and easy to use, it was suddenly everywhere and eventually drove vacuum-tube radios out of the market. In the same way, if today's teens embrace Wildseed's smart skins, the playful products may prove to be a powerful way of introducing the latest advances in wireless technology into the mainstream.
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