Axe Falls on Xelibri
By Carlo Longino, Mon May 24 15:45:00 GMT 2004

Siemens says it's dropped the fashion-first line of handsets after disappointing sales.

The Xelibri line was released to great fanfare in January 2003, with Siemens hoping they'd become must-have fashion accessories that would be updated every spring and fall. The phones put design above all else, and had only the most basic level of features possible, but they failed to excite consumers and where they were initially only sold in fashion boutiques, were eventually available at discount supermarkets and on the Internet at deeply discounted prices. The line has now been stopped after selling just 780,000 devices -- less than 2% of Siemens' total handset sales -- in 2003.

The fashion-forward strategy failed for a number of reasons. The phones' designs failed to catch on -- perhaps they were too faddish, or simply just too ugly. But when the design of handsets sold only on looks fails, it leaves precious little else to drive sales. The phones' prices, EUR 200 to EUR 400, were way too high for supposedly disposable devices. Siemens was simply asking too much when users were getting good-looking handsets with cameras, MP3 players, color screens and other advanced features from their carriers at rock-bottom subsidized prices.

But the company's not giving up the fashion segment just yet, saying it will continue to target the market with more traditional devices, like its popular SL55. It's the right approach to make full-featured "fashion phones", a strategy favored by several other device vendors, packaging handsets that aren't lacking in many of the latest advanced features in head-turning designs. Users have reached a point where they're no longer willing to sacrifice major functionality for (supposedly) fashionable designs.