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Why phones get cancelled?

There are dozens of spy photos of various phones that can make your mouth water floating around the Web - astonishingly beautiful, with very robust feature packs and all-around likable they seem to have what it takes to become your next flame. But for some obscure and idiotic reasons (they must have gone crazy!) phone makers cancel them, occasionally at the very last moment. In this write-up we'll tell you why these seemingly illogical decisions aren't always unfounded and why vendors are less short-sighted and careless than they may seem from time to time.

For starters, you need to realize that the development cycle of any phone usually doesn't exceed 12 (for all ordinary solutions) and 24 months (for something novel) respectively. However, there are cases when a handset is schemed and assembled within 6-7 months, although here we are talking more about entry-level phones. This time span includes not only the period when they design it and outline its feature pack and hardware, but also the stage when the phone is tested and polished on all fronts. Apparently, at any point in time they may run into certain difficulties, which may or may not serve as the reason to cancel a mobile phone.

Curiously, the element that is always planned way before everything else is design - at this moment, companies such as Nokia and Sony Ericsson already have roadmaps of their portfolios drafted up until 2010; and while their forecast horizon averages 24 months, other manufacturers employ a different policy. Samsung, for example, usually plans out its product lines for around a year, and very rarely - for 17 months. All in all, most vendors are forced to gamble, trying to predict what fashion trends will unfold on the market in 24 months time, while not being able to alter already approved designs in any significant fashion. Occasionally they will utilize matte plastic instead of glossy surfaces, modify the color schemes, but that's about it. Radical changes are essentially impossible, simply because that would mean they would have to start it all over.

To be frank, I can't remember the last time I heard that some product was canceled due to its dated or inappropriate design. In this regard, all manufacturers share the notion that while design is an integral part of any product, tastes differ so much these days, that canceling some solution solely because of the way it looks is just not worth the trouble. Now, issues with the phone's mechanics, moving parts and form-factor are way more important. That's especially true for wholly new solutions that haven't been available before. During early stages of prototype testing it may turn out that the mix of materials isn't right or the chassis is designed in such way that every impact shock unavoidably causes some damage to the phone. There is another occasion, although rare, when so-called "rule of paper", which is something you won't hear on press conferences or read in interviews. Personally, I was told about it by one of Sony Ericsson's engineers in Lund. Here is how it works - whenever they find that the battery compartment cover feels somewhat loose or creaks, they take a piece of paper, put it under the lead and then locate the gap or loose end. If it's still impossible to determine what's wrong with it - they put in another piece, then one more and so on, until they reach the point when the battery cover neither squeaks nor moves in its slot. So, the "rule of paper" is as follows: if you have been tackling some design issue for a while, after a dozen of modifications you'll find out that now there are even more problems to solve. At some point, mending some phone's mechanical issues becomes so bothersome that it loses all meaning and usually engineers abandon it for other products. In this case, canceling this phone is the only viable option - imagine what kind of fuss may start should consumers find out that the vast majority of their phones come with a mechanical defect? However, there are some exceptions, when the risk of breakdown is considerable, but the technology is just too good to dump. A perfect example of this scenario is "Jog Dial" wheel found in old Sony's and Sony Ericsson's phones. While this element was very prone to malfunction, it was incredibly popular among consumers, so they had to ditch it step-by-step. At first they made it sturdier, but that didn't help, so there was no other option but to dump it for good. Unfortunately, there was no real compromise solution in that case.

Another instance when a vendor may decide to put some product off its roadmap has much to do with its strategy, when it scraps some platform or operating system in an effort to focus more resources in other areas. In 2008 the platform that suffered this sad fate was UIQ. This way, a lot of Sony Ericsson's products got dismissed, two of them were canceled a week before the scheduled announcement, one managed to hold a while longer, but eventually it ended up in the trash can as well. To get a better idea what these events meant for Sony Ericsson, let's do a rough estimation of how much every phone cost them. So, 15-16 million Euro were spent on design, early stage of development and software; PR materials, localization and other activities burned another 10 million Euros; the tally is 25 million Euros of direct losses, however they probably saved themselves some money by not launching this phone - poor sales and affected brand image (and this type of loss can hardly be quantified) could have taken millions out of the vendor's budget.

ВYou can read our take on the Sony Ericsson G702 (BeiBei), and Sony Ericsson G902 (Paris) that got cancelled earlier this year.

Sony Ericsson G702 (BeiBei):

Sony Ericsson G902 (Paris):

Apart from having UIQ onboard, these two phones were also hindered by mediocre sales of their predecessors - the Sony Ericsson G700 and G900. In other words, postponing their launch would have led to them becoming uncompetitive, whereas unleashing them immediately would have killed the other two phones altogether. So at that time the best way to go was to focus on the offerings that were already out there. By the way, situations like this are pretty common - when the schemes devised by the marketing department don't work out and the already existing phone becomes a real barrier that doesn't let them roll out a replacement. And this situation is actually two-fold. On the one hand, this phone might be so charismatic and beloved in the community that it's worth keeping it on the market even if it means marring the sales of upcoming products (like in the case of the Motorola RAZR). However, there is another scenario when sales aren't looking good, but there is a good chance they will improve in the near future.

Another example is Motorola's RAZR3 (Rubi) that got canceled a bit earlier - it was a decently built metallic folder (pretty thin at that) styled after the V8, with a huge external display and UIQ3. However its problem was that the entire UIQ industry is all but dead right now, so the RAZR3 would have become the last of its kind, which is an unsightly prospect. On top of that, Motorola failed to solve a number of software issues on it, so it wasn't quite finished anyway - getting everything in gear would have take much more time and resources, so they decided to cancel it for good. Because sometimes it's easier to start everything from a scratch than spend a vast amount of time and money on mending all glitches.

The other day Nokia unleashed their latest and greatest 6260 Slide that might seem very likable at a glance. In a nutshell, it's the first S40 phone to feature an HVGA display along with WiFi connectivity, 5 Mpix camera with Carl Zeiss lens. And all these goods come at a very affordable price point - 300 Euros or so. However, many decision makers on the key markets gave it a cold welcome largely due to the fact that Nokia's portfolio already offers somewhat similar solutions, such as the Nokia 6220 Classic and Nokia 6210 Navigator. Clearly, it'd be a bit of a stretch to call them alternatives to this phone, but the important fat is that all these handsets are already out there and are available for less money, which is another way of saying that the 6260 Slide would have failed in most regions. And that's exactly the reason why it will be shipped only to select Asian markets. Up until the last moment it was still unclear whether it'd see daylight or not, since its exact copy (Prism-branded phone) had been canceled early in 2008. Just for the sake of entertainment I'm publishing several images of that phone - metallic battery cover (there was also a version where the facets on the back were made of leather), mirror-esque inserts on the underside and a glossy keypad. All in all, it was a solid handset with a robust feature set, slotted for December 2008 (estimated retail price - around 325 Euros).

Not only did it look like a dream, it was very easy to handle as well, make no mistake about that. However, due to the fact they thought it wouldn't generate substantial sales, Nokia had to throw it right into the thrash can. The bitter truth is that they are targeting the mass market these days, so if some product doesn't seem to qualify (read: doesn't get enough orders from distributors), it gets canceled right away. After all, it's not a common occasion when they launch key products all around the globe without consulting with local HQs.

Wrapping it all up, I have to reiterate what I said at the beginning of this write-up - products get canceled only if there is a valid reason to do so. Furthermore, mobile phones never get dumped because of their design or when they even don't have one (at early stages of development). The main reasons are: being late to the market, shift in priorities, software issues, new components, withdrawal of an old platform. For these reasons, we won't see a great many phones armed with HVGA- VGA-displays in 2009 largely because of how expensive they are and the fact that most vendors are now focusing more on the mass market and lower ASPs. On balance, these days, more often than not phones get canceled because their presence may well hurt the sales of already existing products, which isn't what most vendors can afford. On the other hand, delayed releases of all-round new models are a completely different subject, even though it's still somewhat connected with the problem discussed in this particular article. But that will have to be a separate piece that we'd rather save for the future.


Eldar Murtazin (eldar@mobile-review.com)
Translated by Oleg Kononosov (oleg.kononosov@mobile-review.com)

Published — 2 December 2008

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