Cell Phones Are Handy -- If Your Hands Are Tiny

Handset sizes keep shrinking, but many of the super-small models aren't selling as well as their makers had hoped

Owen Stein, a 28-year-old finance professional living in New York City, bought a $160 Nokia 8290 because a friend had one. The phone was tiny -- 3.9 inches tall and 1.7 inches wide -- and Stein initially thought it was "cool." He figured he could keep the device, which weighs 2.8 ounces, in his pocket instead of having to remove it every time he sat down, as people do with the bulkier models.

But in six months of use, Stein soon discovered the micro size has its disadvantages. Having the transmitting microphone closer to his ear than to his mouth felt weird. Like many cell-phone users, he knew only a few of the handset's 30 features, and the keypad lock wasn't one of them, so the device kept accidentally dialing numbers while in his pocket.

Plus, Stein found the phone's grip so uncomfortable that his mobile conversations usually didn't last for more than 10 minutes. Considering that many people want a portable phone for convenience and to make the most of their time, not being able to use it comfortably for long periods defeats the purpose.

Stein's discomforts ring true with many cell-phone users, says Bryce Rutter, CEO of Metaphase Design Group, specializing in ergonomic product design. While smaller was thought to be better, now analysts are saying there could be too much of a good thing -- or better yet, too little of a useful thing. That could spell bad news for the mobile-phone makers, especially Ericsson (ERICY ) and Motorola (MOT ).


  Nokia (NOK ) was one of a whole pack of manufacturers pushing for phone miniaturization. Ericsson's T28 models measure 3.9 inches by 2 inches. And Motorola's StarTAC MR 501 flip phone is 3.8 inches tall and 2 inches wide. You want tiny phones, you can find them. Trouble is, "we have the ability now to shrink phones so far that they're a pain to use," says Rutter. "This is a train that's crashing as we speak."

Consumers, especially those making repeat purchases and frustrated by the experience of using a small phone, might be opting not to buy them again. "There's very little brand loyalty in this category," says Rutter. "People are changing brands because they haven't had a positive consumer experience."

And wireless carriers, which sell a huge chunk of the handsets (industry lingo for cell phones), now pay particular attention to the ergonomics of phones they purchase from manufacturers. Sprint PCS (PCS ), the nation's fourth-largest wireless carrier, limits orders from vendors whose models are uncomfortable to hold and difficult to use, says Brian Finnerty, senior director of product realization at Sprint PCS. Finnerty wouldn't list the specific manufacturers Sprint doesn't like to buy from, but Ericsson isn't among the vendors it buys from.

Sprint's bestseller is Samsung's SCH-3500 model, which is 4.4 inches tall and 2 inches wide. Mass-market phones shouldn't go smaller than that, Finnerty says, as only a limited pool of people -- those with small hands -- can use them comfortably.


  Fact is, up to 15% of the 500 million mobile phones that are expected to be sold this year worldwide -- or 75 million -- are too small to ensure user satisfaction, estimates Andrew Cole, an analyst with technology consultancy Adventis. Are there that many small-handed people who need cell phones? "Manufacturers haven't realized that hands haven't been shrinking," says Rutter.

By analysts' consensus, the worst offenders in cell-phone design are Ericsson and Motorola. The two companies haven't invested enough in consumer research and aren't keeping their fingers on the pulse of the consumers as well as they should, says Greg Teets, an analyst with A.G. Edwards & Sons. And "it's a huge difference at the point of sale," he says.

In the first quarter of this year, Ericsson's share of the handset market was 6.8%, down from 11.6% in the same period of 2000. Motorola's market share fell from 16% in the first quarter of 2000 to 13.2% in 2001, according to Dataquest. Poor design -- the wrong sizes, too square a shape, the wrong colors -- and too many features users don't want were to blame at least in part, says Bryan Prohm, an analyst with Dataquest.


  Nokia's design is better than that of many of its rivals, and the company gained market share in the past year, rising from owning 27.9% of the world's handset market in the first quarter of 2000 to a 35.3% share in the first quarter of this year. "There will always be these certain niches in the market where size means everything," says Rutter. "But outside this category, Nokia does a very good job in shapes of phones that are easy to manipulate with one hand." The company also seems to put less emphasis on making smaller phones and more on following trends.

Ericsson execs, while admitting they might've gotten a bit carried away with shrinking their phones, say their blind tests show users prefer the shape of their phones to those of competitors. Motorola didn't respond to repeated requests for comment.

But all the manufacturers realize design is of growing importance. Cell phones aren't for geeks anymore -- they're a mass-market product. And in a mass market, "design would be one of the most important purchasing criteria," says Prohm, as opposed to multiple options and the smaller-is-better hype.


  Sprint's Finnerty believes consumers now want to have more choice in colors, finish, and shape. The devices "have to trend more closely to fashion," he says. Small size is still important, but most analysts agree that manufacturers have reached the limit as to how small a phone can be.

Indeed, as consumers increasingly use their mobile phones to access the Web, the phones' displays -- and, in some cases, handsets themselves -- will likely grow larger again, says Edie Adams, manager for user research for Microsoft hardware. Jan Wareby, executive vice-president of Ericsson's consumer-products division, emphasizes that his company agrees with that vision, as well as with the complaint that some of the company's phones might be "too small."

The problem with manufacturers was "they didn't know when to hit the brake on the size button," says Adventis' Cole. "Now, momentum is going the other way." And Ericsson and Motorola in particular better catch up -- on size as well as design -- or risk losing even more market share.

By Olga Kharif in New York

Edited by Patricia O'Connell

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