by Derek Kerton

Filed Under:

Hutchison Slashes 3G Phone Cost

This is starting to be ridiculously repetitive, and Techdirt is resisting shadenfreude, but that's an uphill battle. Hutchison Whampoa, who we've derided for poor planning, marketing, and execution on their worldwide 3G launches, reported worse-than-expected losses on their 3G operations last week, prompting another 3G inspired stock dip. In response, zillionaire owner Li Ka Shing apparently demanded that the 3G executives double their adoption rates from 10,000 users a day worldwide to 20,000. So, the Hutchison brain trust once again looked into their bag of tricks to see how to stimulate adoption. Unfortunately, their marketing toolkit (from what they've shown us around the world) is very limited, so Hutchison resorted to, once again, slashing prices. This time 3G handset cost in Hong Kong. The top phone will now cost US$254. This will indeed increase penetration, but at the cost of a substantial subsidy on the handset. Message to Hutch: You've got to find some other way of attracting customers than slashing prices. Anybody can get successful penetration by giving away their product, but the goal is to make a successful business. How about content exclusives? The creation of a perceived superior brand? Providing functionality that cannot be obtained elsewhere? Targeting a niche that is likely to want 3G, and developing targeted, vertical applications for the niche, and then build from there? Launching products only after they have been QA approved? Setting expectations at the right level, and over-delivering by a notch? Maybe I'm making it sound too easy to succeed with 3G... but you make it look unreasonably hard.

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