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This week, LG Electronics (based in South Korea) is getting a bit more fashionable. The company is going to launch a sleek new cell phone. In fact, it is without buttons, as is the case with Apple, Inc.'s (NASDAQ:AAPL) new iPhone. But, instead of creating a new brand, LG is teaming up with Prada.
I had a chance to interview Donna Flagg, who is a branding expert and the CEO of The Krysalis Group. According to her:
"It makes perfect sense for Prada to extend into cell phones because the strength of their brand is in accessories, and in today's times the cell phone has become perhaps the ultimate accessory. And since Prada typically appeals to a post-college customer, what better way to attract younger generations than to make their most valued possession (or one of them at least) into a status symbol at the same time. In fact, technology is to kids what designer labels were to their predecessors - it's a part of how they identify themselves. And unlike fashion labels, technology, especially cell phones, appeals to both genders equally. So as a move, conceptually, it's a good one. But all of that being said, they are competing with iPhone, so aside from the prestige label, the design has to measure up to the $700.00 price point and compete with Apple's ability to produce extremely well designed products."
Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.
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Reader Comments (Page 1 of 1)
1-21-2007 @ 9:23PM
starwxrwx said...
When people buy (and pay extraordinary amounts of money for) Prada, they at least have a high expectation of quality.
I hope the Prada phone goes well, but the quality of mobile phones these days is pretty bad - and a lot of it is to do with the user interface. I haven't used an LG phone lately so I can only speculate, but I really hope they fine-tuned it for this phone and I sure hope it never hangs because if I was buying Prada, I would expect it to work flawlessly.
I think design companies who want to branch into electronics need to take a leaf from Apple's book and really get involved in the whole user experience - just like the inside of a Prada bag will have lining details only you will ever see, the inside of the phone experience should be equally as well thought-out and a pleasant surprise.
And in doing so they could really push up their margins - if people pay more than an iPod for an LV iPod CASE then they can afford to pay more for a really well thought out gadget - phone, music player etc (which I think is why the iPhone will have no trouble selling at a high price and high profit margin).