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Luxury Brands Target Cell Phone Market

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Luxury Brands Aim for Multi-Billion Dollar Revenues from the Mobile Handset Market, Says ABI Research

Dior recently introduced its own line of in-house designed mobile phones. Other prestige brands are also adding cellular handsets to their product lines. As personal items used frequently in public, mobile handsets can take on a powerful symbolism, representing the user’s social status and personality. In partnership with handset manufacturers and vendors, luxury brands are starting to carve out a distinct niche within the cellular handset industry.

ABI Research forecasts that revenues from luxury branded handsets will exceed $11 billion next year, increasing to more than $43 billion in 2013.

Research director Kevin Burden comments, “For luxury goods producers, mobile phones are a logical addition to their basic product portfolios of jewelry, watches, and other fashion accessories. From the perspective of handset manufacturers, a luxury mobile phone does not simply mean a new handset model, it represents a meaningful strategic approach to increased brand equity.”

Given the heated price competition in handset markets, vendors have struggled to deal with low margins. Cost-cutting alone is to some extent seen as of questionable effectiveness as a way around this impasse. Given the competitive environment in the handset market, manufacturers are looking for ways to differentiate their intangible assets: premium value and brand power.

Since a handset comprises a mass of technological attributes, its market value is basically determined by all of the components and labor, and its technological performance. This is not likely to change. But consumers are also very aware of brand image and premium value. This gives manufacturers additional leverage in securing customer loyalty, and increasingly forms part of vendors’ long-term strategies for growth.

ABI Research’s new study, Luxury Mobile Phones, demonstrates how the driving force behind the luxury handset market is closely related to handset manufacturers’ reliance on brand power. It examines consumer attributes associated with luxury and brand power, their impact on the various market participants, and the brand management issues for manufacturers. A case study provides lessons in luxury handset brand management.

It forms part of the firm’s Mobile Devices Research Service, which also includes other Research Reports, Research Briefs, Market Data, an Online Database, ABI Insights, ABI Vendor Matrices, and analyst inquiry support.

ABI Research is a leading market research firm focused on the impact of emerging technologies on global consumer and business markets. Utilizing a unique blend of market intelligence, primary research, and expert assessment from its worldwide team of industry analysts, ABI Research assists hundreds of clients each year with their strategic growth initiatives. For information, visit http://www.abiresearch.com, or call +1.516.624.2500.

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