skydeck

The difference between cell phones and PCs

Posted by Jason on Feb 21, 2008 in Mobile Market, Phones, Public Policy  |  Comments (3)  |  Share 

zzzPhone is a brave attempt to take the build-to-order model pioneered by Dell for PCs and apply it to the cell phone market. Several blogs have covered them and the New York Times picked up the story today.

This is the kind of innovation that open access makes possible. The market for the zzzPhone today is probably no more than a few tens of thousands of units worldwide, so it wouldn’t make sense for a major carrier to do a deal with them. But zzzPhone doesn’t need permission from a cell phone company to launch; their phones will work on any GSM network, including AT&T and T-Mobile in the US.

But even with open access, there are big challenges ahead for zzzPhone. PCs are not like cell phones and the Dell model may not succeed.

PCs are like office furniture. Phones are like jewelry. In general, businesses buy PCs and are happy to order by part number, but consumers buy phones and want to see and touch them first. Laptops fall somewhere in between: it’s a PC, but consumers care about the design. That’s been good for Apple and bad for Dell, which has had to build retail distribution for the first time.

All attempts to sell phones online have run into this problem, even though consumers have grown used to buying all sorts of other goods and services online – including other telecommunication services.