Trendy Xelibri from Siemens or the story of a doomed project

In 2000-2001, the growing problems of the mobile division of Siemens became apparent within the company as well, the management continued to smile victoriously, but at the same time took care of finding a strategy to overcome the crisis. This time can safely be called the heyday of market research from Siemens Mobile, neither before nor after the company has carried out so many works dedicated to the future of the mobile terminal market. Management was given a golden ticket to pursue any strategy that would lead the division to a return to market position, increase profitability, and secure the future. It remained to determine such a strategy and start acting.

One of the company's consultants was George Appling, who worked for McKinsey. The ideas presented by the young and ambitious consultant appealed to the management of Siemens Mobile. The company decided to try their hand at a new niche of fashion accessory phones, and George was called to lead the project, giving him carte blanche. On behalf of Siemens, the project is initiated by Rudi Lamprecht, who heads the Information and Communication mobile division, of which Siemens Mobile is a part. The target set by Siemens CEO Hienrich von Pierer for all mobile divisions is an 8-11 percent return on investment by the end of fiscal year 2005. A similar figure is set for the new Xelibri facility, no exceptions are made.

The young Texan recruited fellow countryman Chad Ellis, whom he met at Harvard Business School, to work on the project. Since the middle of 2001, the development of the concept of a mobile phone as an accessory for fashionable youth began. The premise of the project, an idea sold by Siemens Mobile, looked extremely attractive. Create a mobile phone brand that replicates Swatch's success in the watch market. Inexpensive phone, acting as the second, third model, but not the main device. Accessory first, phone second.

For the creators of the concept, this project could be a winning ticket, so when planning, the main emphasis was on the need for a new brand, a separate enterprise for such phones. In favor of such a decision, the need to distribute the accessory phone through fashion boutiques was presented, but not the usual retail for mobile phones. The experience of Vertu was cited as an example, the fact that this company was a subsidiary of Nokia, but not a division of the manufacturer.

Were Appling's calculations and calculations sincere, or they were sly, we are unlikely to know. Perhaps there was a desire to control the enterprise, to get maximum freedom from the parent company. The fateful decision was made in mid-2001 - Siemens Mobile creates a subsidiary, in which George Appling becomes president. This is the pinnacle of Xelibri development, maximum favored nation treatment, minimal budget restrictions, expectation of a miracle and huge sales. The management of Siemens Mobile believes that a miracle will happen, and the subsidiary will do the impossible, give impetus to the development of phones under the Siemens brand. Having gained a foothold in the market, Xelibri will not only bring profit to the parent company, but will begin to form a positive image for it, become a happy horse in each of the races. This is how this project is seen inside Siemens Mobile, control over Appling's strategic decisions is minimal, all comments are advisory in nature. The president of a new company has carte blanche to perform a miracle. And they are looking forward to it.

The backbone of the new company is formed by marketers, managers from Siemens Mobile, external consultants are responsible for the design direction, although the overall strategy is controlled from within Xelibri. For Siemens management, Xelibri is one of the projects that is not given much attention, but they are counting on it. Control from the parent company is minimal.

The project is starting to take shape, Xelibri believe they can revolutionize the phone market, a sincere belief that is not clouded by the problems of the day. In order not to share success with anyone, a reckless decision is made to create Xelibri phones from scratch. For a market that switched to the concept of platforms in the late 90s, replicating existing solutions in various designs, such a decision does not seem justified. But the "feature" of phones allows us to explain the need to create them from scratch. This is additional time, money, but the time before the launch of the first collection in the spring of 2003 is huge.

Practically the whole of 2002 is spent on working out the concept of selling phones under the Xelibri brand (the word is pronounced "ex-sell-i-bree", new partners sometimes get confused and call the brand differently). No one wants to share the success with the existing divisions of Siemens Mobile around the world in Xelibri. The mission of the company is nothing less than to make a revolution and help Siemens with its success, but according to Appling, it is impossible to rely on the "outdated" implementation system, which is also unsuitable for Xelibri. With Siemens Mobile behind them, Xelibri refuses most of the help, citing the need to build a different system of retail, advertising, and PR. Endless meetings with fashion stores in Italy, negotiations in the business capital of the world - London - alternate with brainstorming over the design of the first collection.

The ambitions of the founding fathers are also manifested in this issue, the cult TV series StarTrek becomes the ideological basis of accessory phones. In the childhood of any American boy, the Enterprise took its place, its tireless team and stories taking place on various planets. A cult of reverence has developed around the series in the United States, many companies use the fame of this work to launch their own products, scoop ideas. For example, the first clamshell on the market, a model from Motorola, is called StarTac, the similarity of the name with the TV series is not accidental. The company created a communicator similar to the one used by the characters in the film. The success of StarTac at the time of its release was undeniable, and Xelibri wants to repeat something similar.

Designers are being told in no uncertain terms to create phones unlike anything on the market, futuristic accessories. The company's research shows that up to 40 percent of buyers are guided by the design of phones, choosing first of all the appearance, and not the cost or brand. Xelibri believes that this segment of 40 percent of all sales is an extremely tasty morsel, and taking up to 10 percent of it in the first year will be a success. In the first communications of the company, journalists misinterpret the number of 40 percent, they believe that this is the goal of Xelibri, although no one hatches such plans. One of the misunderstandings, clearly showing the gap between the company's management and the real world, the project is already doomed at this moment, the close launch of the devices on the market only pushes Xelibri to the end of the story. But inside the company, everything is calm, there is no sense of wrongness of what is happening yet.

The first collection of phones is planned to be released in the spring of 2003, the design of accessories is being developed. Model Xelibri 3 is created in the form of an alien dagger, which women will wear as a pendant on their chests. Other models can be attached to a belt, to a bag, they are more familiar. Relatively small size of phones, unusual shape leave no room for a keyboard. Xelibri does not see this as a problem, you can enter names letter by letter by scrolling the alphabet, and the presence of voice dialing makes calling subscribers simple. The rationale behind the removal of the keyboard and most modern features is found in the study, with Appling repeatedly saying that "up to 80 percent of phone features are never used." In the understanding of yesterday's consultant, it seems logical that there are no functions that users do not resort to. A common misconception that developers and marketers at Siemens Mobile know about, but they do not see the development of the project and cannot influence it. Expertise of professionals in the field of mobile phones turns out to be unclaimed, and specialists who have moved to Xelibri have already fallen under the spell of the project and cannot judge it objectively. External consultants' research is not about the company's strategy per se, it's a sacred cow. The reports are devoted to certain aspects of bringing products to the market, the relevance of design, retail capacity, niche, and so on.

Проект Xelibri состоит в 2002 году из одних допущений. Так, объем продаж через магазины аксессуаров в четырех странах (Великобритания, Франция, Италия, Гонконг) оценивается с помощью полевых исследований: опросов потенциальных покупателей либо компаний, владеющих магазинами. В 2003 году эти страны войдут в первую волну продаж, к ним добавится Германия, Испания, Сингапур, Китай. К сожалению, нет возможности провести параллели между запуском других типов аксессуаров (очки, часы и тому подобное) и телефонами, опыт магазинов по продаже технологичных устройств отсутствует. В Xelibri продолжают верить в свою звезду, все сомнения толкуют в собственную пользу.

К концу 2002 года сформирован модельный ряд из четырех аппаратов, каждый из которых получает порядковый номер. Имя телефона формируется из названия компании и номера модели: Xelibri 1, Xelibri 2, Xelibri 3, Xelibri 4. Для разработчиков узнавание родных моделей объяснимо, для всех остальных представляет проблему, в фокус-группах люди путаются между формой аппаратов и их названиями. Но этот момент не считают принципиальным, так как при наличии активной PR-поддержки, рекламы незнание должно быть нивелировано в короткие сроки.

Inside the company, preparations for product launches are in the final stretch. The cost of phones is determined, which is unexpectedly and unpleasantly high, which makes the low cost for the Xelibri brand unaffordable. Xelibri follows the path of creating ODM products, the capacities of Siemens Mobile are not involved. Each product is developed as a separate project, which also increases the cost and time.

Production is calculated from Mercedes-benz calculation of 100,000 units for the first launch wave in the first quarter of sales . Retail prices are determined on the basis of 199 Euros for the youngest device of the family and 399 Euros for the older model. The difference is not in functionality, but in the design of these models. Deafeningly expensive for a small volume of production. Siemens Mobile needs to explain the discrepancy between price and understanding of an affordable accessory (like a Swatch watch, the success idea of ​​which was sold in a beautiful package). The presentations feature research data showing the huge potential of the market. Based on these data, there can be no problems for sales. The stage of active self-hypnosis begins, when the company drives away thoughts that the rough assumptions made at the first stage may turn out to be wrong.

Marketing deals with the cost of fashion accessories at the level of 300-400 Euros, shows that such a price level will ensure the exclusivity of the product, emphasize the difference from ordinary phones. Since the cost was determined, the last chance to launch sales through the traditional channels for Siemens Mobile has been lost - operators in Europe, retail chains in Asia and Russia. Lack of work with operators also automatically means that the cost of Xelibri brand phones will not decrease, the devices will not be subsidized. The idea of ​​Xelibri collections is designed for an active sales cycle of 6 months, then the old collection becomes a rarity, leaves the market, new phones appear. The life cycle of such an accessory phone in the company is estimated at 12 months.

For comparison: the cost of a fashion device from Nokia at the same time (Nokia 8210, the presence of replaceable panels, the minimum size of the device, attractive design) is about 400 Euros, with a contract with an operator that subsidizes the model, the price drops to 99 Euro. The model has a lifespan of about two years, the device keeps its relevance from the fashion point of view for up to one year (active phase of sales). Even such a comparison shows that Nokia's product cycle is twice that of Xelibri's. Nokia's brand awareness is much higher than that of Siemens, in 2002 the market share of Siemens Mobile worldwide is about 8 percent, for Nokia it is about 36.

Xelibri understands this, but the company's approach to the market is innovative. It was typical for Siemens Mobile to create a product for a certain niche, for example, a phone for businessmen or a device for a youth audience. Xelibri is trying to create a new market segment, a niche. Directly opposite approach, akin to the same Vertu. As long as there are no examples of success or failure of such projects on the market, the Xelibri team acts as pioneers.

Start of retail sales - first collection

The name of the first collection is “Space on Earth”, production has been launched, and it remains only to introduce the new line of phones to the world, as well as the Xelibri trademark. The Macron agency, which has been working with Siemens for a long time, is developing the marketing promotion concept. Based on the input provided by Xelibri, relationships are built with boutiques and fashion stores. When launching the first collection, the focus is not on advertising communications, but on the novelty of products, wide press coverage. The spring-summer collection needs time to be recognized by consumers, so the announcement is scheduled for the end of January 2003, while sales should begin in selected markets in March, in September the number of markets will be dramatically increased. But it all depends on the first sales and how consumers will accept the phones. The company is waiting for the first test by combat.

By the time the first collection was announced, the second series of phones is in the works, it uses the same ideas as in the first devices, there is no technological difference between them. And here comes the first significant moment, on January 27, 2003, Siemens talks about its Xelibri project. Let's remember how it was, let's read the press release:

Siemens mobile has taken a bold step to drive the growth of the mobile phone market by creating a new collection of user terminals that feature original shape and design, feature-rich functionality and are focused on voice communication . XELIBRI will be sold mainly in salons and fashion stores. The company plans to release two collections of these stylish phones annually. In April 2003, the new fashion phones will appear in the UK, France, Germany, Italy, Spain, Singapore, China and Hong Kong, and from September 2003 in Russia and other countries.

In many countries, between 70% and 85% of the population already owns mobile phones, cell phone market growth has slowed, and the mobile industry needs new incentives. Siemens offers an innovative solution to this problem - creating both a new category in the market and the demand of users to own several phones at the same time. And today, when the appearance of the device is one of the most important criteria when buying a phone, Siemens' radical new approach to design is driven by the need of the times.

“XELIBRI is fashionable phone accessories. Today, most people buy the mobile phone that looks best, and many do not miss the opportunity to demonstrate it. Thus, in the future, mobile phones can become the same stylish accessory as watches, handbags, shoes. We foresee that soon people will buy several stylish mobile phones and match them to the mood, color and style of clothing or some kind of event,” said George Appling, president of the XELIBRI line.

Rudi Lamprecht, Member of the Management Board of Siemens AG, commented on the launch of the new line of phones: “The launch of the new brand is an important element of Siemens mobile's market strategy, which divides the market into stylish devices with basic technological capabilities and functional phones. We will continue to develop the latest technologies for both feature phones and mobile applications, network infrastructure, wireless telephony and wireless modules. This bold move will further enhance the value of the Siemens mobile brand.”

Each series of XELIBRI will consist of four phones and will be divided into spring-summer and autumn-winter, as in the field of haute couture. Phones will be produced in limited quantities.

Designed dates for the launch of the collection in September 2003 in other markets - this is a wish, not reality. For example, in the Russian market, models have not been certified, the company's partners have not received samples, and Xelibri insists on selling products not through ordinary retail chains, but through boutiques. The representative office of Siemens Mobile has no links with boutiques, their alignment is a separate and long process, for which there is no time. A technical problem also comes up - it is necessary to add support for Russian fonts, SMS input for phones, if they want to be sold in Russia. Localization takes a lot of time, the company is behind schedule. The result is the lack of finished products by September, by this time the first sales data are already known, they do not inspire optimism. But let's go back to February 2003 and see how the press reacts to the new products.

Xelibri's expectation of interest in new, unusual products from the press was fully justified. In the Xelibri project, this moment was the only one of all that was calculated with maximum accuracy and accuracy. From the side of Siemens, PR is involved at all levels, the president of Xelibri gives endless interviews. The reaction of the press is positive, journalists seized on an unusual novelty, they broadcast Xelibri messages almost without distortion. The idea for potential buyers sounds like this: it's fashionable, it's modern, it's unusual. The first round of the fight for minds has been won, interest in the product is at a high level. The unusual design attracts, people discuss novelties. George Appling says that soon people will have up to 6-7 phones for all occasions, one for cocktails, one for outdoor walks, the main device for work. Dreams sound beautiful, and journalists seize on them, the louder the statement, the more interesting for them.

And now comes the moment of truth - the beginning of sales. Inside Xelibri there is a revival, everyone is in high spirits. The best stores have the entire collection on the shelves, everything is ready for the appearance of the first buyers. Unfortunately, the company abandoned seeding, a free distribution of Xelibri phones among opinion leaders, representatives of the fashion industry. For a brand unknown in the fashion market, this would have been a useful step, but they decided to refuse it, considering the number of publications sufficient to attract attention. Unfortunately, the company did not understand the difference between these two tools, since Siemens Mobile did not have such experience, or it was specific.

The first days of sales began to bring bad news. There was no talk of excitement, sales went to dozens of pieces, and then even the primary interest began to fade away, Xelibri ceased to be sold. The results of the first month were not just bad, they spoke about the failure of the line in all countries, the numbers differed slightly and were equally bad. At the end of May 2003, I had a meeting with Rudy Lamprecht, and my attempt to discuss Xelibri sales was met with polite answers that it is too early to judge the results of the first months, Siemens has no data on them. Although at that moment the company hastily changed all their plans, canceled the models created for the second collection, and tried to realize what the positioning mistake was, and how buyers perceive these devices.

In those days, I made a special trip to Selfridges in London to see how Xelibri machines were being sold. They did not catch the eye, they were lost against the background of other accessories, the sales girl could not really tell about their capabilities. From her narrative it followed that these are trendy phones for one reason - they are trendy. No more, no less. There was no interest on the part of visitors to these phones, rare buyers looked at them, turned them over in their hands and put them aside. The product was not desirable, and the average Selfridges visitor had zero or close awareness.

The price has become one of the main complaints from buyers, in their eyes, not very technologically advanced phone was too expensive. The absence of a color screen, the MMS service widely advertised at that time, other functions and, most importantly, the inconvenience of entering text in the absence of a keyboard. People didn't want to buy a phone as an accessory, they wanted to be stylish, fashionable all the time, not just outside of work or in the evening. Studies of a potential niche, the behavior of buyers in it, showed their inconsistency when the desired was presented as real. A bitter lesson for Xelibri. Having abandoned the Siemens audience, which could support the sales of such devices, Xelibri chose a thorny path.

The negative aspects also included the perception of the quality of the handsets compared to similarly priced phones from Nokia. The plastic in Xelibri was perceived as inexpensive, cheap, and not typical of products in this class. But the main thing is that buyers did not perceive the new brand as fashionable, it had no history, they did not see celebrities using these devices, there was no reference point. The Xelibri brand was perceived as one of the new brands with no weight on the market. And for the creation of a segment of fashionable devices it was a verdict, but the struggle for the consumer has not ended. Siemens Mobile gave another chance to Xelibri, started work on the second collection of devices from scratch.

The Second Coming of Xelibri - Fixing Bugs

User feedback has been taken into account, a step has been taken towards their desire to have a regular keyboard. The decision is fundamental, it puts an end to the unusual design, differences from most devices. All future models, without exception, must have keys. Blurred positioning of the Xelibri ruler.

Another fundamental decision is to work with retail, it is necessary to highlight the phones on the shelves, provide active advertising support in all channels, assure partners that the failures of the first collection will be corrected in a short time. And this is not a metaphor, time is running out, the beginning of June 2003 is in the yard, 4 months remain before the retail release of the second collection. There is no time for reflection, it is necessary to act. Design development is entrusted to IDEO, there are no designers and resources within the company. The design is created in a short time, there is no room for maneuver.

The Mother agency is on a tight deadline. It is necessary to create an advertising concept, which was done in less than two months. The name of the ATL campaign is “That’s so tomorrow”, the concept is not new but has not been widely played. The possibility of people in the future to buy attractive shells (beauty body suite) is being played up, putting on which, a person turns into a handsome man. It is necessary to focus on the key markets where the first collection had the best sales, these are seven countries in Europe. The focus is on the UK, Germany, Italy and France.

Promotion comes through massive TV ads, which are still easy to find on YouTube today, as well as posters that depict the process of transforming ugly people into handsome ones. Lightning, with the help of which they "put on" the second skin, turns into a tattoo, they are distributed in clubs, they imitate advertising.

Another part of the campaign is the distribution of packages for the "second" skin in nightclubs, direct mailing to addresses where fashion buyers live. For example, residents of the Knightsbridge area found such packages near their doors one morning.

Small stands with flyers appear in stores, they are designed to attract the attention of customers.

The press is cooler about the second collection, but due to advertising, sales in the early days are even better than for the first Xelibri, a timid hope appears in the company. The second week of sales brings disappointment, buyers ignore the brand, neither the keyboard nor advertising saves, the product is ignored. Siemens Mobile is not inclined to forgive mistakes, they are considering ways to minimize their losses. Representative offices of the company in countries where Xelibri is not present are given the task to consider the possibilities of selling these devices, they are trying to impose them on everyone. But the representative offices do not want to worsen their performance, as a result, they sabotage the project under various pretexts. For example, in Russia the situation developed in this way.

The volume of the order for the second collection is two times less than for the first devices, about 50 thousand of them were produced. But the first telephones are in stores and warehouses, there are many of them. It is urgent to find ways to sell them. For existing partners, price reduction is unacceptable, b

Trendy Xelibri from Siemens or the story of a doomed project

In 2000-2001, the growing problems of the mobile division of Siemens became apparent within the company as well, the management continued to smile victoriously, but at the same time took care of finding a strategy to overcome the crisis. This time can safely be called the heyday of market research from Siemens Mobile, neither before nor after the company has carried out so many works dedicated to the future of the mobile terminal market. Management was given a golden ticket to pursue any strategy that would lead the division to a return to market position, increase profitability, and secure the future. It remained to determine such a strategy and start acting.

One of the company's consultants was George Appling, who worked for McKinsey. The ideas presented by the young and ambitious consultant appealed to the management of Siemens Mobile. The company decided to try their hand at a new niche of fashion accessory phones, and George was called to lead the project, giving him carte blanche. On behalf of Siemens, the project is initiated by Rudi Lamprecht, who heads the Information and Communication mobile division, of which Siemens Mobile is a part. The target set by Siemens CEO Hienrich von Pierer for all mobile divisions is an 8-11 percent return on investment by the end of fiscal year 2005. A similar figure is set for the new Xelibri facility, no exceptions are made.

The young Texan recruited fellow countryman Chad Ellis, whom he met at Harvard Business School, to work on the project. Since the middle of 2001, the development of the concept of a mobile phone as an accessory for fashionable youth began. The premise of the project, an idea sold by Siemens Mobile, looked extremely attractive. Create a mobile phone brand that replicates Swatch's success in the watch market. Inexpensive phone, acting as the second, third model, but not the main device. Accessory first, phone second.

For the creators of the concept, this project could be a winning ticket, so when planning, the main emphasis was on the need for a new brand, a separate enterprise for such phones. In favor of such a decision, the need to distribute the accessory phone through fashion boutiques was presented, but not the usual retail for mobile phones. The experience of Vertu was cited as an example, the fact that this company was a subsidiary of Nokia, but not a division of the manufacturer.

Were Appling's calculations and calculations sincere, or they were sly, we are unlikely to know. Perhaps there was a desire to control the enterprise, to get maximum freedom from the parent company. The fateful decision was made in mid-2001 - Siemens Mobile creates a subsidiary, in which George Appling becomes president. This is the pinnacle of Xelibri development, maximum favored nation treatment, minimal budget restrictions, expectation of a miracle and huge sales. The management of Siemens Mobile believes that a miracle will happen, and the subsidiary will do the impossible, give impetus to the development of phones under the Siemens brand. Having gained a foothold in the market, Xelibri will not only bring profit to the parent company, but will begin to form a positive image for it, become a happy horse in each of the races. This is how this project is seen inside Siemens Mobile, control over Appling's strategic decisions is minimal, all comments are advisory in nature. The president of a new company has carte blanche to perform a miracle. And they are looking forward to it.

The backbone of the new company is formed by marketers, managers from Siemens Mobile, external consultants are responsible for the design direction, although the overall strategy is controlled from within Xelibri. For Siemens management, Xelibri is one of the projects that is not given much attention, but they are counting on it. Control from the parent company is minimal.

The project is starting to take shape, Xelibri believe they can revolutionize the phone market, a sincere belief that is not clouded by the problems of the day. In order not to share success with anyone, a reckless decision is made to create Xelibri phones from scratch. For a market that switched to the concept of platforms in the late 90s, replicating existing solutions in various designs, such a decision does not seem justified. But the "feature" of phones allows us to explain the need to create them from scratch. This is additional time, money, but the time before the launch of the first collection in the spring of 2003 is huge.

Practically the whole of 2002 is spent on working out the concept of selling phones under the Xelibri brand (the word is pronounced "ex-sell-i-bree", new partners sometimes get confused and call the brand differently). No one wants to share the success with the existing divisions of Siemens Mobile around the world in Xelibri. The mission of the company is nothing less than to make a revolution and help Siemens with its success, but according to Appling, it is impossible to rely on the "outdated" implementation system, which is also unsuitable for Xelibri. With Siemens Mobile behind them, Xelibri refuses most of the help, citing the need to build a different system of retail, advertising, and PR. Endless meetings with fashion stores in Italy, negotiations in the business capital of the world - London - alternate with brainstorming over the design of the first collection.

The ambitions of the founding fathers are also manifested in this issue, the cult TV series StarTrek becomes the ideological basis of accessory phones. In the childhood of any American boy, the Enterprise took its place, its tireless team and stories taking place on various planets. A cult of reverence has developed around the series in the United States, many companies use the fame of this work to launch their own products, scoop ideas. For example, the first clamshell on the market, a model from Motorola, is called StarTac, the similarity of the name with the TV series is not accidental. The company created a communicator similar to the one used by the characters in the film. The success of StarTac at the time of its release was undeniable, and Xelibri wants to repeat something similar.

Designers are being told in no uncertain terms to create phones unlike anything on the market, futuristic accessories. The company's research shows that up to 40 percent of buyers are guided by the design of phones, choosing first of all the appearance, and not the cost or brand. Xelibri believes that this segment of 40 percent of all sales is an extremely tasty morsel, and taking up to 10 percent of it in the first year will be a success. In the first communications of the company, journalists misinterpret the number of 40 percent, they believe that this is the goal of Xelibri, although no one hatches such plans. One of the misunderstandings, clearly showing the gap between the company's management and the real world, the project is already doomed at this moment, the close launch of the devices on the market only pushes Xelibri to the end of the story. But inside the company, everything is calm, there is no sense of wrongness of what is happening yet.

The first collection of phones is planned to be released in the spring of 2003, the design of accessories is being developed. Model Xelibri 3 is created in the form of an alien dagger, which women will wear as a pendant on their chests. Other models can be attached to a belt, to a bag, they are more familiar. The relatively small size of the phones, the unusual shape leaves no room for the keyboard. Xelibri does not see this as a problem, you can enter names letter by letter by scrolling the alphabet, and the presence of voice dialing makes calling subscribers simple. The rationale behind the removal of the keyboard and most modern features is found in the study, with Appling repeatedly saying that "up to 80 percent of phone features are never used." In the understanding of yesterday's consultant, it seems logical that there are no functions that users do not resort to. A common misconception that developers and marketers at Siemens Mobile know about, but they do not see the development of the project and cannot influence it. Expertise of professionals in the field of mobile phones turns out to be unclaimed, and specialists who have moved to Xelibri have already fallen under the spell of the project and cannot judge it objectively. External consultants' research is not about the company's strategy per se, it's a sacred cow. The reports are devoted to certain aspects of bringing products to the market, the relevance of design, retail capacity, niche, and so on.

Проект Xelibri состоит в 2002 году из одних допущений. Так, объем продаж через магазины аксессуаров в четырех странах (Великобритания, Франция, Италия, Гонконг) оценивается с помощью полевых исследований: опросов потенциальных покупателей либо компаний, владеющих магазинами. В 2003 году эти страны войдут в первую волну продаж, к ним добавится Германия, Испания, Сингапур, Китай. К сожалению, нет возможности провести параллели между запуском других типов аксессуаров (очки, часы и тому подобное) и телефонами, опыт магазинов по продаже технологичных устройств отсутствует. В Xelibri продолжают верить в свою звезду, все сомнения толкуют в собственную пользу.

К концу 2002 года сформирован модельный ряд из четырех аппаратов, каждый из которых получает порядковый номер. Имя телефона формируется из названия компании и номера модели: Xelibri 1, Xelibri 2, Xelibri 3, Xelibri 4. Для разработчиков узнавание родных моделей объяснимо, для всех остальных представляет проблему, в фокус-группах люди путаются между формой аппаратов и их названиями. Но этот момент не считают принципиальным, так как при наличии активной PR-поддержки, рекламы незнание должно быть нивелировано в короткие сроки.

Inside the company, preparations for product launches are in the final stretch. The cost of phones is determined, which is unexpectedly and unpleasantly high, which makes the low cost for the Xelibri brand unaffordable. Xelibri follows the path of creating ODM products, the capacities of Siemens Mobile are not involved. Each product is developed as a separate project, which also increases the cost and time.

Production is calculated from Mercedes-benz calculation of 100,000 units for the first launch wave in the first quarter of sales . Retail prices are determined on the basis of 199 Euros for the youngest device of the family and 399 Euros for the older model. The difference is not in functionality, but in the design of these models. Deafeningly expensive for a small volume of production. Siemens Mobile needs to explain the discrepancy between price and understanding of an affordable accessory (like a Swatch watch, the success idea of ​​which was sold in a beautiful package). The presentations feature research data showing the huge potential of the market. Based on these data, there can be no problems for sales. The stage of active self-hypnosis begins, when the company drives away thoughts that the rough assumptions made at the first stage may turn out to be wrong.

Marketing deals with the cost of fashion accessories at the level of 300-400 Euros, shows that such a price level will ensure the exclusivity of the product, emphasize the difference from ordinary phones. Since the cost was determined, the last chance to launch sales through the traditional channels for Siemens Mobile has been lost - operators in Europe, retail chains in Asia and Russia. Lack of work with operators also automatically means that the cost of Xelibri brand phones will not decrease, the devices will not be subsidized. The idea of ​​Xelibri collections is designed for an active sales cycle of 6 months, then the old collection becomes a rarity, leaves the market, new phones appear. The life cycle of such an accessory phone in the company is estimated at 12 months.

For comparison: the cost of a fashion device from Nokia at the same time (Nokia 8210, the presence of replaceable panels, the minimum size of the device, attractive design) is about 400 Euros, with a contract with an operator that subsidizes the model, the price drops to 99 Euro. The model has a lifespan of about two years, the device keeps its relevance from the fashion point of view for up to one year (active phase of sales). Even such a comparison shows that Nokia's product cycle is twice that of Xelibri's. Nokia's brand awareness is much higher than that of Siemens, in 2002 the market share of Siemens Mobile worldwide is about 8 percent, for Nokia it is about 36.

Xelibri understands this, but the company's approach to the market is innovative. It was typical for Siemens Mobile to create a product for a certain niche, for example, a phone for businessmen or a device for a youth audience. Xelibri is trying to create a new market segment, a niche. Directly opposite approach, akin to the same Vertu. As long as there are no examples of success or failure of such projects on the market, the Xelibri team acts as pioneers.

Start of retail sales - first collection

The name of the first collection is “Space on Earth”, production has been launched, and it remains only to introduce the new line of phones to the world, as well as the Xelibri trademark. The Macron agency, which has been working with Siemens for a long time, is developing the marketing promotion concept. Based on the input provided by Xelibri, relationships are built with boutiques and fashion stores. When launching the first collection, the focus is not on advertising communications, but on the novelty of products, wide press coverage. The spring-summer collection needs time to be recognized by consumers, so the announcement is scheduled for the end of January 2003, while sales should begin in selected markets in March, in September the number of markets will be dramatically increased. But it all depends on the first sales and how consumers will accept the phones. The company is waiting for the first test by combat.

By the time the first collection was announced, the second series of phones is in the works, it uses the same ideas as in the first devices, there is no technological difference between them. And here comes the first significant moment, on January 27, 2003, Siemens talks about its Xelibri project. Let's remember how it was, let's read the press release:

Siemens mobile has taken a bold step to drive the growth of the mobile phone market by creating a new collection of user terminals that feature original shape and design, feature-rich functionality and are focused on voice communication . XELIBRI will be sold mainly in salons and fashion stores. The company plans to release two collections of these stylish phones annually. In April 2003, the new fashion phones will appear in the UK, France, Germany, Italy, Spain, Singapore, China and Hong Kong, and from September 2003 in Russia and other countries.

In many countries, between 70% and 85% of the population already owns mobile phones, cell phone market growth has slowed, and the mobile industry needs new incentives. Siemens offers an innovative solution to this problem - creating both a new category in the market and the demand of users to own several phones at the same time. And today, when the appearance of the device is one of the most important criteria when buying a phone, Siemens' radical new approach to design is driven by the need of the times.

“XELIBRI is fashionable phone accessories. Today, most people buy the mobile phone that looks best, and many do not miss the opportunity to demonstrate it. Thus, in the future, mobile phones can become the same stylish accessory as watches, handbags, shoes. We foresee that soon people will buy several stylish mobile phones and match them to the mood, color and style of clothing or some kind of event,” said George Appling, president of the XELIBRI line.

Rudi Lamprecht, Member of the Management Board of Siemens AG, commented on the launch of the new line of phones: “The launch of the new brand is an important element of Siemens mobile's market strategy, which divides the market into stylish devices with basic technological capabilities and functional phones. We will continue to develop the latest technologies for both feature phones and mobile applications, network infrastructure, wireless telephony and wireless modules. This bold move will further enhance the value of the Siemens mobile brand.”

Each series of XELIBRI will consist of four phones and will be divided into spring-summer and autumn-winter, as in the field of haute couture. Phones will be produced in limited quantities.

Designed dates for the launch of the collection in September 2003 in other markets - this is a wish, not reality. For example, in the Russian market, models have not been certified, the company's partners have not received samples, and Xelibri insists on selling products not through ordinary retail chains, but through boutiques. The representative office of Siemens Mobile has no links with boutiques, their alignment is a separate and long process, for which there is no time. A technical problem also comes up - it is necessary to add support for Russian fonts, SMS input for phones, if they want to be sold in Russia. Localization takes a lot of time, the company is behind schedule. The result is the lack of finished products by September, by this time the first sales data are already known, they do not inspire optimism. But let's go back to February 2003 and see how the press reacts to the new products.

Xelibri's expectation of interest in new, unusual products from the press was fully justified. In the Xelibri project, this moment was the only one of all that was calculated with maximum accuracy and accuracy. From the side of Siemens, PR is involved at all levels, the president of Xelibri gives endless interviews. The reaction of the press is positive, journalists seized on an unusual novelty, they broadcast Xelibri messages almost without distortion. The idea for potential buyers sounds like this: it's fashionable, it's modern, it's unusual. The first round of the fight for minds has been won, interest in the product is at a high level. The unusual design attracts, people discuss novelties. George Appling says that soon people will have up to 6-7 phones for all occasions, one for cocktails, one for outdoor walks, the main device for work. Dreams sound beautiful, and journalists seize on them, the louder the statement, the more interesting for them.

And now comes the moment of truth - the beginning of sales. Inside Xelibri there is a revival, everyone is in high spirits. The best stores have the entire collection on the shelves, everything is ready for the appearance of the first buyers. Unfortunately, the company abandoned seeding, a free distribution of Xelibri phones among opinion leaders, representatives of the fashion industry. For a brand unknown in the fashion market, this would have been a useful step, but they decided to refuse it, considering the number of publications sufficient to attract attention. Unfortunately, the company did not understand the difference between these two tools, since Siemens Mobile did not have such experience, or it was specific.

The first days of sales began to bring bad news. There was no talk of excitement, sales went to dozens of pieces, and then even the primary interest began to fade away, Xelibri stopped being sold. The results of the first month were not just bad, they spoke about the failure of the line in all countries, the numbers differed slightly and were equally bad. At the end of May 2003, I had a meeting with Rudy Lamprecht, and my attempt to discuss Xelibri sales was met with polite answers that it is too early to judge the results of the first months, Siemens has no data on them. Although at that moment the company hastily changed all their plans, canceled the models created for the second collection, and tried to realize what the positioning mistake was, and how buyers perceive these devices.

In those days, I made a special trip to Selfridges in London to see how Xelibri machines were being sold. They did not catch the eye, they were lost against the background of other accessories, the seller girl could not really tell about their capabilities. From her narrative it followed that these are trendy phones for one reason - they are trendy. No more, no less. There was no interest from visitors to these phones, rare buyers looked at them, turned them over in their hands and put them aside. The product was not desirable, and the average Selfridges visitor had zero or close awareness.

The price has become one of the main complaints from buyers, in their eyes, not very technologically advanced phone was too expensive. The absence of a color screen, the MMS service widely advertised at that time, other functions and, most importantly, the inconvenience of entering text in the absence of a keyboard. People didn't want to buy a phone as an accessory, they wanted to be stylish, fashionable all the time, not just outside of work or in the evening. Studies of a potential niche, the behavior of buyers in it, showed their inconsistency when the desired was presented as real. A bitter lesson for Xelibri. Having abandoned the Siemens audience, which could support the sales of such devices, Xelibri chose a thorny path.

The negative aspects also included the perception of the quality of the handsets compared to similarly priced phones from Nokia. The plastic in Xelibri was perceived as inexpensive, cheap, and not typical of products in this class. But the main thing is that buyers did not perceive the new brand as fashionable, it had no history, they did not see celebrities using these devices, there was no reference point. The Xelibri brand was perceived as one of the new brands with no weight on the market. And for the creation of a segment of fashionable devices, it was a verdict, but the struggle for the consumer has not ended. Siemens Mobile gave another chance to Xelibri, started work on the second collection of devices from scratch.

The Second Coming of Xelibri - Fixing Bugs

User feedback has been taken into account, a step has been taken towards their desire to have a regular keyboard. The decision is fundamental, it puts an end to the unusual design, differences from most devices. All future models, without exception, must have keys. Blurred positioning of the Xelibri ruler.

Another fundamental decision is to work with retail, it is necessary to highlight the phones on the shelves, provide active advertising support in all channels, assure partners that the failures of the first collection will be corrected in a short time. And this is not a metaphor, time is running out, it is the beginning of June 2003, 4 months remain before the retail release of the second collection. There is no time for reflection, it is necessary to act. Design development is entrusted to IDEO, there are no designers and resources within the company. The design is created in a short time, there is no room for maneuver.

The Mother agency is on a tight deadline. It is necessary to create an advertising concept, which was done in less than two months. The name of the ATL campaign is “That’s so tomorrow”, the concept is not new but has not been widely played. The possibility of people in the future to buy attractive shells (beauty body suite) is being played up, putting on which, a person turns into a handsome man. It is necessary to focus on the key markets where the first collection had the best sales, these are seven countries in Europe. The focus is on the UK, Germany, Italy and France.

Promotion comes through massive TV ads, which are still easy to find on YouTube today, as well as posters that depict the process of transforming ugly people into handsome ones. Lightning, with the help of which they "put on" the second skin, turns into a tattoo, they are distributed in clubs, they imitate advertising.

Another part of the campaign is the distribution of packages for the "second" skin in nightclubs, direct mailing to addresses where fashion buyers live. For example, residents of the Knightsbridge area found such packages near their doors one morning.

Small stands with flyers appear in stores, they are designed to attract the attention of customers.

The press is cooler about the second collection, but due to advertising, sales in the early days are even better than for the first Xelibri, a timid hope appears in the company. The second week of sales brings disappointment, buyers ignore the brand, neither the keyboard nor advertising saves, the product is ignored. Siemens Mobile is not inclined to forgive mistakes, they are considering ways to minimize their losses. Representative offices of the company in countries where Xelibri is not present are given the task to consider the possibilities of selling these devices, they are trying to impose them on everyone. But the representative offices do not want to worsen their performance, as a result, they sabotage the project under various pretexts. For example, in Russia the situation developed in this way.

The volume of the order for the second collection is two times less than for the first devices, about 50 thousand of them were produced. But the first telephones are in stores and warehouses, there are many of them. It is urgent to find ways to sell them. For existing partners, price reduction is unacceptable, b

Trendy Xelibri from Siemens or the story of a doomed project

In 2000-2001, the growing problems of the mobile division of Siemens became apparent within the company as well, the management continued to smile victoriously, but at the same time took care of finding a strategy to overcome the crisis. This time can safely be called the heyday of market research from Siemens Mobile, neither before nor after the company has carried out so many works dedicated to the future of the mobile terminal market. Management was given a golden ticket to pursue any strategy that would lead the division to a return to market position, increase profitability, and secure the future. It remained to determine such a strategy and start acting.

One of the company's consultants was George Appling, who worked for McKinsey. The ideas presented by the young and ambitious consultant appealed to the management of Siemens Mobile. The company decided to try their hand at a new niche of fashion accessory phones, and George was called to lead the project, giving him carte blanche. On behalf of Siemens, the project is initiated by Rudi Lamprecht, who heads the Information and Communication mobile division, of which Siemens Mobile is a part. The target set by Siemens CEO Hienrich von Pierer for all mobile divisions is an 8-11 percent return on investment by the end of fiscal year 2005. A similar figure is set for the new Xelibri facility, no exceptions are made.

The young Texan recruited fellow countryman Chad Ellis, whom he met at Harvard Business School, to work on the project. Since the middle of 2001, the development of the concept of a mobile phone as an accessory for fashionable youth began. The premise of the project, an idea sold by Siemens Mobile, looked extremely attractive. Create a mobile phone brand that replicates Swatch's success in the watch market. Inexpensive phone, acting as the second, third model, but not the main device. Accessory first, phone second.

For the creators of the concept, this project could be a winning ticket, so when planning, the main emphasis was on the need for a new brand, a separate enterprise for such phones. In favor of such a decision, the need to distribute the accessory phone through fashion boutiques was presented, but not the usual retail for mobile phones. The experience of Vertu was cited as an example, the fact that this company was a subsidiary of Nokia, but not a division of the manufacturer.

Were Appling's calculations and calculations sincere, or they were sly, we are unlikely to know. Perhaps there was a desire to control the enterprise, to get maximum freedom from the parent company. The fateful decision was made in mid-2001 - Siemens Mobile creates a subsidiary, in which George Appling becomes president. This is the pinnacle of Xelibri development, maximum favored nation treatment, minimal budget restrictions, expectation of a miracle and huge sales. The management of Siemens Mobile believes that a miracle will happen, and the subsidiary will do the impossible, give impetus to the development of phones under the Siemens brand. Having gained a foothold in the market, Xelibri will not only bring profit to the parent company, but will begin to form a positive image for it, become a happy horse in each of the races. This is how this project is seen inside Siemens Mobile, control over Appling's strategic decisions is minimal, all comments are advisory in nature. The president of a new company has carte blanche to perform a miracle. And they are looking forward to it.

The backbone of the new company is formed by marketers, managers from Siemens Mobile, external consultants are responsible for the design direction, although the overall strategy is controlled from within Xelibri. For Siemens management, Xelibri is one of the projects that is not given much attention, but they are counting on it. Control from the parent company is minimal.

The project is starting to take shape, Xelibri believe they can revolutionize the phone market, a sincere belief that is not clouded by the problems of the day. In order not to share success with anyone, a reckless decision is made to create Xelibri phones from scratch. For the market, which in the late 90s switched to the concept of platforms, replicating existing solutions in various designs, such a decision does not seem justified. But the "feature" of phones allows us to explain the need to create them from scratch. This is additional time, money, but the time before the launch of the first collection in the spring of 2003 is huge.

Practically the whole of 2002 is spent on working out the concept of selling phones under the Xelibri brand (the word is pronounced "ex-sell-i-bree", new partners sometimes get confused and call the brand differently). No one wants to share the success with the existing divisions of Siemens Mobile around the world in Xelibri. The mission of the company is nothing less than to make a revolution and help Siemens with its success, but according to Appling, it is impossible to rely on the "outdated" implementation system, which is also unsuitable for Xelibri. With Siemens Mobile behind them, Xelibri refuses most of the help, citing the need to build a different system of retail, advertising, and PR. Endless meetings with fashion stores in Italy, negotiations in the business capital of the world - London - alternate with brainstorming over the design of the first collection.

The ambitions of the founding fathers are also manifested in this issue, the cult TV series StarTrek becomes the ideological basis of accessory phones. In the childhood of any American boy, the Enterprise took its place, its tireless team and stories taking place on various planets. A cult of reverence has developed around the series in the United States, many companies use the fame of this work to launch their own products, scoop ideas. For example, the first clamshell on the market, a model from Motorola, is called StarTac, the similarity of the name with the TV series is not accidental. The company created a communicator similar to the one used by the characters in the film. The success of StarTac at the time of its release was undeniable, and Xelibri wants to repeat something similar.

Designers are being told in no uncertain terms to create phones unlike anything on the market, futuristic accessories. The company's research shows that up to 40 percent of buyers are guided by the design of phones, choosing first of all the appearance, and not the cost or brand. Xelibri believes that this segment of 40 percent of all sales is an extremely tasty morsel, and taking up to 10 percent of it in the first year will be a success. In the first communications of the company, journalists misinterpret the number of 40 percent, they believe that this is the goal of Xelibri, although no one hatches such plans. One of the misunderstandings, clearly showing the gap between the company's management and the real world, the project is already doomed at this moment, the close launch of the devices on the market only pushes Xelibri to the end of the story. But inside the company, everything is calm, there is no sense of wrongness of what is happening yet.

The first collection of phones is planned to be released in the spring of 2003, the design of accessories is being developed. Model Xelibri 3 is created in the form of an alien dagger, which women will wear as a pendant on their chests. Other models can be attached to a belt, to a bag, they are more familiar. The relatively small size of the phones, the unusual shape leaves no room for the keyboard. Xelibri does not see this as a problem, you can enter names letter by letter by scrolling the alphabet, and the presence of voice dialing makes calling subscribers simple. The rationale behind the removal of the keyboard and most modern features is found in the study, with Appling repeatedly saying that "up to 80 percent of phone features are never used." In the understanding of yesterday's consultant, it seems logical that there are no functions that users do not resort to. A common misconception that developers and marketers at Siemens Mobile know about, but they do not see the development of the project and cannot influence it. Expertise of professionals in the field of mobile phones turns out to be unclaimed, and specialists who have moved to Xelibri have already fallen under the spell of the project and cannot judge it objectively. External consultants' research is not about the company's strategy per se, it's a sacred cow. The reports are devoted to certain aspects of bringing products to the market, the relevance of design, retail capacity, niche, and so on.

Проект Xelibri состоит в 2002 году из одних допущений. Так, объем продаж через магазины аксессуаров в четырех странах (Великобритания, Франция, Италия, Гонконг) оценивается с помощью полевых исследований: опросов потенциальных покупателей либо компаний, владеющих магазинами. В 2003 году эти страны войдут в первую волну продаж, к ним добавится Германия, Испания, Сингапур, Китай. К сожалению, нет возможности провести параллели между запуском других типов аксессуаров (очки, часы и тому подобное) и телефонами, опыт магазинов по продаже технологичных устройств отсутствует. В Xelibri продолжают верить в свою звезду, все сомнения толкуют в собственную пользу.

К концу 2002 года сформирован модельный ряд из четырех аппаратов, каждый из которых получает порядковый номер. Имя телефона формируется из названия компании и номера модели: Xelibri 1, Xelibri 2, Xelibri 3, Xelibri 4. Для разработчиков узнавание родных моделей объяснимо, для всех остальных представляет проблему, в фокус-группах люди путаются между формой аппаратов и их названиями. Но этот момент не считают принципиальным, так как при наличии активной PR-поддержки, рекламы незнание должно быть нивелировано в короткие сроки.

Inside the company, preparations for product launches are in the final stretch. The cost of phones is determined, which is unexpectedly and unpleasantly high, which makes the low cost for the Xelibri brand unaffordable. Xelibri follows the path of creating ODM products, the capacities of Siemens Mobile are not involved. Each product is developed as a separate project, which also increases the cost and time.

Production is calculated from Mercedes-benz calculation of 100,000 units for the first launch wave in the first quarter of sales . Retail prices are determined on the basis of 199 Euros for the youngest device of the family and 399 Euros for the older model. The difference is not in functionality, but in the design of these models. Deafeningly expensive for a small volume of production. Siemens Mobile needs to explain the discrepancy between price and understanding of an affordable accessory (like a Swatch watch, the success idea of ​​which was sold in a beautiful package). The presentations feature research data showing the huge potential of the market. Based on these data, there can be no problems for sales. The stage of active self-hypnosis begins, when the company drives away thoughts that the rough assumptions made at the first stage may turn out to be wrong.

Marketing deals with the cost of fashion accessories at the level of 300-400 Euros, shows that such a price level will ensure the exclusivity of the product, emphasize the difference from ordinary phones. Since the cost was determined, the last chance to launch sales through the traditional channels for Siemens Mobile has been lost - operators in Europe, retail chains in Asia and Russia. Lack of work with operators also automatically means that the cost of Xelibri brand phones will not decrease, the devices will not be subsidized. The idea of ​​Xelibri collections is designed for an active sales cycle of 6 months, then the old collection becomes a rarity, leaves the market, new phones appear. The life cycle of such an accessory phone in the company is estimated at 12 months.

For comparison: the cost of a fashion device from Nokia at the same time (Nokia 8210, the presence of replaceable panels, the minimum size of the device, attractive design) is about 400 Euros, with a contract with an operator that subsidizes the model, the price drops to 99 Euro. The model has a lifespan of about two years, the device keeps its relevance from the fashion point of view for up to one year (active phase of sales). Even such a comparison shows that Nokia's product cycle is twice that of Xelibri's. Nokia's brand awareness is much higher than that of Siemens, in 2002 the market share of Siemens Mobile worldwide is about 8 percent, for Nokia it is about 36.

Xelibri understands this, but the company's approach to the market is innovative. It was typical for Siemens Mobile to create a product for a certain niche, for example, a phone for businessmen or a device for a youth audience. Xelibri is trying to create a new market segment, a niche. Directly opposite approach, akin to the same Vertu. As long as there are no examples of success or failure of such projects on the market, the Xelibri team acts as pioneers.

Start of retail sales - first collection

The name of the first collection is “Space on Earth”, production has been launched, and it remains only to introduce the new line of phones to the world, as well as the Xelibri trademark. The Macron agency, which has been working with Siemens for a long time, is developing the marketing promotion concept. Based on the input provided by Xelibri, relationships are built with boutiques and fashion stores. When launching the first collection, the focus is not on advertising communications, but on the novelty of products, wide press coverage. The spring-summer collection needs time to be recognized by consumers, so the announcement is scheduled for the end of January 2003, while sales should begin in selected markets in March, in September the number of markets will be dramatically increased. But it all depends on the first sales and how consumers will accept the phones. The company is waiting for the first test by combat.

By the time the first collection was announced, the second series of phones is in the works, it uses the same ideas as in the first devices, there is no technological difference between them. And here comes the first significant moment, on January 27, 2003, Siemens talks about its Xelibri project. Let's remember how it was, let's read the press release:

Siemens mobile has taken a bold step to drive the growth of the mobile phone market by creating a new collection of user terminals that feature original shape and design, feature-rich functionality and are focused on voice communication . XELIBRI will be sold mainly in salons and fashion stores. The company plans to release two collections of these stylish phones annually. In April 2003, the new fashion phones will appear in the UK, France, Germany, Italy, Spain, Singapore, China and Hong Kong, and from September 2003 in Russia and other countries.

In many countries, between 70% and 85% of the population already owns mobile phones, cell phone market growth has slowed, and the mobile industry needs new incentives. Siemens offers an innovative solution to this problem - creating both a new category in the market and the demand of users to own several phones at the same time. And today, when the appearance of the device is one of the most important criteria when buying a phone, Siemens' radical new approach to design is driven by the need of the times.

“XELIBRI is fashionable phone accessories. Today, most people buy the mobile phone that looks best, and many do not miss the opportunity to demonstrate it. Thus, in the future, mobile phones can become the same stylish accessory as watches, handbags, shoes. We foresee that soon people will buy several stylish mobile phones and match them to the mood, color and style of clothing or some kind of event,” said George Appling, president of the XELIBRI line.

Rudi Lamprecht, Member of the Management Board of Siemens AG, commented on the launch of the new line of phones: “The launch of the new brand is an important element of Siemens mobile's market strategy, which divides the market into stylish devices with basic technological capabilities and functional phones. We will continue to develop the latest technologies for both feature phones and mobile applications, network infrastructure, wireless telephony and wireless modules. This bold move will further enhance the value of the Siemens mobile brand.”

Each series of XELIBRI will consist of four phones and will be divided into spring-summer and autumn-winter, as in the field of haute couture. Phones will be produced in limited quantities.

Designed dates for the launch of the collection in September 2003 in other markets - this is a wish, not reality. For example, in the Russian market, models have not been certified, the company's partners have not received samples, and Xelibri insists on selling products not through ordinary retail chains, but through boutiques. The representative office of Siemens Mobile has no links with boutiques, their alignment is a separate and long process, for which there is no time. A technical problem also comes up - it is necessary to add support for Russian fonts, SMS input for phones, if they want to be sold in Russia. Localization takes a lot of time, the company is behind schedule. The result is the lack of finished products by September, by this time the first sales data are already known, they do not inspire optimism. But let's go back to February 2003 and see how the press reacts to the new products.

Xelibri's expectation of interest in new, unusual products from the press was fully justified. In the Xelibri project, this moment was the only one of all that was calculated with maximum accuracy and accuracy. From the side of Siemens, PR is involved at all levels, the president of Xelibri gives endless interviews. The reaction of the press is positive, journalists seized on an unusual novelty, they broadcast Xelibri messages almost without distortion. The idea for potential buyers sounds like this: it's fashionable, it's modern, it's unusual. The first round of the fight for minds has been won, interest in the product is at a high level. The unusual design attracts, people discuss novelties. George Appling says that soon people will have up to 6-7 phones for all occasions, one for cocktails, one for outdoor walks, the main device for work. Dreams sound beautiful, and journalists seize on them, the louder the statement, the more interesting for them.

And now comes the moment of truth - the beginning of sales. Inside Xelibri there is a revival, everyone is in high spirits. The best stores have the entire collection on the shelves, everything is ready for the appearance of the first buyers. Unfortunately, the company abandoned seeding, a free distribution of Xelibri phones among opinion leaders, representatives of the fashion industry. For a brand unknown in the fashion market, this would have been a useful step, but they decided to refuse it, considering the number of publications sufficient to attract attention. Unfortunately, the company did not understand the difference between these two tools, since Siemens Mobile did not have such experience, or it was specific.

The first days of sales began to bring bad news. There was no talk of excitement, sales went to dozens of pieces, and then even the primary interest began to fade away, Xelibri stopped being sold. The results of the first month were not just bad, they spoke about the failure of the line in all countries, the numbers differed slightly and were equally bad. At the end of May 2003, I had a meeting with Rudy Lamprecht, and my attempt to discuss Xelibri sales was met with polite answers that it is too early to judge the results of the first months, Siemens has no data on them. Although at that moment the company hastily changed all their plans, canceled the models created for the second collection, and tried to realize what the positioning mistake was, and how buyers perceive these devices.

In those days, I made a special trip to Selfridges in London to see how Xelibri machines were being sold. They did not catch the eye, they were lost against the background of other accessories, the seller girl could not really tell about their capabilities. From her narrative it followed that these are trendy phones for one reason - they are trendy. No more, no less. There was no interest from visitors to these phones, rare buyers looked at them, turned them over in their hands and put them aside. The product was not desirable, and the average Selfridges visitor had zero or close awareness.

The price has become one of the main complaints from buyers, in their eyes, not very technologically advanced phone was too expensive. The absence of a color screen, the MMS service widely advertised at that time, other functions and, most importantly, the inconvenience of entering text in the absence of a keyboard. People didn't want to buy a phone as an accessory, they wanted to be stylish, fashionable all the time, not just outside of work or in the evening. Studies of a potential niche, the behavior of buyers in it, showed their inconsistency when the desired was presented as real. A bitter lesson for Xelibri. Having abandoned the Siemens audience, which could support the sales of such devices, Xelibri chose a thorny path.

The negative aspects also included the perception of the quality of the handsets compared to similarly priced phones from Nokia. The plastic in Xelibri was perceived as inexpensive, cheap, and not typical of products in this class. But the main thing is that buyers did not perceive the new brand as fashionable, it had no history, they did not see celebrities using these devices, there was no reference point. The Xelibri brand was perceived as one of the new brands with no weight on the market. And for the creation of a segment of fashionable devices, it was a verdict, but the struggle for the consumer has not ended. Siemens Mobile gave another chance to Xelibri, started work on the second collection of devices from scratch.

The Second Coming of Xelibri - Fixing Bugs

User feedback has been taken into account, a step has been taken towards their desire to have a regular keyboard. The decision is fundamental, it puts an end to the unusual design, differences from most devices. All future models, without exception, must have keys. Blurred positioning of the Xelibri ruler.

Another fundamental decision is to work with retail, it is necessary to highlight the phones on the shelves, provide active advertising support in all channels, assure partners that the failures of the first collection will be corrected in a short time. And this is not a metaphor, time is running out, the beginning of June 2003 is in the yard, 4 months remain before the retail release of the second collection. There is no time for reflection, it is necessary to act. Design development is entrusted to IDEO, there are no designers and resources within the company. The design is created in a short time, there is no room for maneuver.

The Mother agency is on a tight deadline. It is necessary to create an advertising concept, which was done in less than two months. The name of the ATL campaign is “That’s so tomorrow”, the concept is not new but has not been widely played. The possibility of people in the future to buy attractive shells (beauty body suite) is being played up, putting on which, a person turns into a handsome man. It is necessary to focus on the key markets where the first collection had the best sales, these are seven countries in Europe. The focus is on the UK, Germany, Italy and France.

Promotion comes through massive TV ads, which are still easy to find on YouTube today, as well as posters that depict the process of transforming ugly people into handsome ones. Lightning, with the help of which they "put on" the second skin, turns into a tattoo, they are distributed in clubs, they imitate advertising.

Another part of the campaign is the distribution of packages for the "second" skin in nightclubs, direct mailing to addresses where fashion buyers live. For example, residents of the Knightsbridge area found such packages near their doors one morning.

Small stands with flyers appear in stores, they are designed to attract the attention of customers.

The press is cooler about the second collection, but due to advertising, sales in the early days are even better than for the first Xelibri, a timid hope appears in the company. The second week of sales brings disappointment, buyers ignore the brand, neither the keyboard nor advertising saves, the product is ignored. Siemens Mobile is not inclined to forgive mistakes, they are considering ways to minimize their losses. Representative offices of the company in countries where Xelibri is not present are given the task to consider the possibilities of selling these devices, they are trying to impose them on everyone. But the representative offices do not want to worsen their performance, as a result, they sabotage the project under various pretexts. For example, in Russia the situation developed in this way.

The volume of the order for the second collection is two times less than for the first devices, about 50 thousand of them were produced. But the first telephones are in stores and warehouses, there are many of them. It is urgent to find ways to sell them. For existing partners, price reduction is unacceptable, b

Trendy Xelibri from Siemens or the story of a doomed project

In 2000-2001, the growing problems of the mobile division of Siemens became apparent within the company as well, the management continued to smile victoriously, but at the same time took care of finding a strategy to overcome the crisis. This time can safely be called the heyday of market research from Siemens Mobile, neither before nor after the company has carried out so many works dedicated to the future of the mobile terminal market. Management was given a golden ticket to pursue any strategy that would lead the division to a return to market position, increase profitability, and secure the future. It remained to determine such a strategy and start acting.

One of the company's consultants was George Appling, who worked for McKinsey. The ideas presented by the young and ambitious consultant appealed to the management of Siemens Mobile. The company decided to try their hand at a new niche of fashion accessory phones, and George was called to lead the project, giving him carte blanche. On behalf of Siemens, the project is initiated by Rudi Lamprecht, who heads the Information and Communication mobile division, of which Siemens Mobile is a part. The target set by Siemens CEO Hienrich von Pierer for all mobile divisions is an 8-11 percent return on investment by the end of fiscal year 2005. A similar figure is set for the new Xelibri facility, no exceptions are made.

The young Texan recruited fellow countryman Chad Ellis, whom he met at Harvard Business School, to work on the project. Since the middle of 2001, the development of the concept of a mobile phone as an accessory for fashionable youth began. The premise of the project, an idea sold by Siemens Mobile, looked extremely attractive. Create a mobile phone brand that replicates Swatch's success in the watch market. Inexpensive phone, acting as the second, third model, but not the main device. Accessory first, phone second.

For the creators of the concept, this project could be a winning ticket, so when planning, the main emphasis was on the need for a new brand, a separate enterprise for such phones. In favor of such a decision, the need to distribute the accessory phone through fashion boutiques was presented, but not the usual retail for mobile phones. The experience of Vertu was cited as an example, the fact that this company was a subsidiary of Nokia, but not a division of the manufacturer.

Were Appling's calculations and calculations sincere, or they were sly, we are unlikely to know. Perhaps there was a desire to control the enterprise, to get maximum freedom from the parent company. The fateful decision was made in mid-2001 - Siemens Mobile creates a subsidiary, in which George Appling becomes president. This is the pinnacle of Xelibri development, maximum favored nation treatment, minimal budget restrictions, expectation of a miracle and huge sales. The management of Siemens Mobile believes that a miracle will happen, and the subsidiary will do the impossible, give impetus to the development of phones under the Siemens brand. Having gained a foothold in the market, Xelibri will not only bring profit to the parent company, but will begin to form a positive image for it, become a happy horse in each of the races. This is how this project is seen inside Siemens Mobile, control over Appling's strategic decisions is minimal, all comments are advisory in nature. The president of a new company has carte blanche to perform a miracle. And they are looking forward to it.

The backbone of the new company is formed by marketers, managers from Siemens Mobile, external consultants are responsible for the design direction, although the overall strategy is controlled from within Xelibri. For Siemens management, Xelibri is one of the projects that is not given much attention, but they are counting on it. Control from the parent company is minimal.

The project is starting to take shape, Xelibri believe they can revolutionize the phone market, a sincere belief that is not clouded by the problems of the day. In order not to share success with anyone, a reckless decision is made to create Xelibri phones from scratch. For a market that switched to the concept of platforms in the late 90s, replicating existing solutions in various designs, such a decision does not seem justified. But the "feature" of phones allows us to explain the need to create them from scratch. This is additional time, money, but the time before the launch of the first collection in the spring of 2003 is huge.

Practically the whole of 2002 is spent on working out the concept of selling phones under the Xelibri brand (the word is pronounced "ex-sell-i-bree", new partners sometimes get confused and call the brand differently). No one wants to share the success with the existing divisions of Siemens Mobile around the world in Xelibri. The mission of the company is nothing less than to make a revolution and help Siemens with its success, but according to Appling, it is impossible to rely on the "outdated" implementation system, which is also unsuitable for Xelibri. With Siemens Mobile behind them, Xelibri refuses most of the help, citing the need to build a different system of retail, advertising, and PR. Endless meetings with fashion stores in Italy, negotiations in the business capital of the world - London - alternate with brainstorming over the design of the first collection.

The ambitions of the founding fathers are also manifested in this issue, the cult TV series StarTrek becomes the ideological basis of accessory phones. In the childhood of any American boy, the Enterprise took its place, its tireless team and stories taking place on various planets. A cult of reverence has developed around the series in the United States, many companies use the fame of this work to launch their own products, scoop ideas. For example, the first clamshell on the market, a model from Motorola, is called StarTac, the similarity of the name with the TV series is not accidental. The company created a communicator similar to the one used by the characters in the film. The success of StarTac at the time of its release was undeniable, and Xelibri wants to repeat something similar.

Designers are being told in no uncertain terms to create phones unlike anything on the market, futuristic accessories. The company's research shows that up to 40 percent of buyers are guided by the design of phones, choosing first of all the appearance, and not the cost or brand. Xelibri believes that this segment of 40 percent of all sales is an extremely tasty morsel, and taking up to 10 percent of it in the first year will be a success. In the first communications of the company, journalists misinterpret the number of 40 percent, they believe that this is the goal of Xelibri, although no one hatches such plans. One of the misunderstandings, clearly showing the gap between the company's management and the real world, the project is already doomed at this moment, the close launch of the devices on the market only pushes Xelibri to the end of the story. But inside the company, everything is calm, there is no sense of wrongness of what is happening yet.

The first collection of phones is planned to be released in the spring of 2003, the design of accessories is being developed. Model Xelibri 3 is created in the form of an alien dagger, which women will wear as a pendant on their chests. Other models can be attached to a belt, to a bag, they are more familiar. The relatively small size of the phones, the unusual shape leaves no room for the keyboard. Xelibri does not see this as a problem, you can enter names letter by letter by scrolling the alphabet, and the presence of voice dialing makes calling subscribers simple. The rationale behind the removal of the keyboard and most modern features is found in the study, with Appling repeatedly saying that "up to 80 percent of phone features are never used." In the understanding of yesterday's consultant, it seems logical that there are no functions that users do not resort to. A common misconception that developers and marketers at Siemens Mobile know about, but they do not see the development of the project and cannot influence it. Expertise of professionals in the field of mobile phones turns out to be unclaimed, and specialists who have moved to Xelibri have already fallen under the spell of the project and cannot judge it objectively. External consultants' research is not about the company's strategy per se, it's a sacred cow. The reports are devoted to certain aspects of bringing products to the market, the relevance of design, retail capacity, niche, and so on.

The Xelibri project consists in 2002 of some assumptions. Thus, the volume of sales through accessories stores in four countries (Great Britain, France, Italy, Hong Kong) is estimated using field research: surveys of potential buyers or companies that own stores. In 2003, these countries will enter the first wave of sales, Germany, Spain, Singapore, and China will be added to them. Unfortunately, there is no way to draw parallels between the launch of other types of accessories (glasses, watches, etc.) and phones; there is no experience of stores selling high-tech devices. Xelibri continues to believe in their star, they interpret all doubts in their own favor.

By the end of 2002, a model range of four devices was formed, each of which receives a serial number. The phone name is formed from the company name and model number: Xelibri 1, Xelibri 2, Xelibri 3, Xelibri 4. For developers, recognizing native models is understandable, for everyone else it is a problem, in focus groups people get confused between the shape of the devices and their names. But this moment is not considered fundamental, since in the presence of active PR support, advertising, ignorance should be leveled in a short time.

Inside the company, preparations for product launches are in the final stretch. The cost of phones is determined, which is unexpectedly and unpleasantly high, which makes the low cost for the Xelibri brand unaffordable. Xelibri follows the path of creating ODM products, the capacities of Siemens Mobile are not involved. Each product is developed as a separate project, which also increases the cost and time.

The production volume is calculated from the Mercedes-benz calculation of 100,000 vehicles for the first launch wave in the first quarter of sales. Retail prices are determined on the basis of 199 Euros for the youngest device of the family and 399 Euros for the older model. The difference is not in functionality, but in the design of these models. Deafeningly expensive for a small volume of production. Siemens Mobile needs to explain the discrepancy between price and understanding of an affordable accessory (like a Swatch watch, the success idea of ​​which was sold in a beautiful package). The presentations feature research data showing the huge potential of the market. Based on these data, there can be no problems for sales. The stage of active self-hypnosis begins, when the company drives away thoughts that the rough assumptions made at the first stage may turn out to be wrong.

Production volume is calculated from Mercedes-benz mercedes-benz calculation of 100,000 devices for the first launch wave in the first quarter of sales. Retail prices are determined on the basis of 199 Euros for the youngest device of the family and 399 Euros for the older model. The difference is not in functionality, but in the design of these models. Deafeningly expensive for a small production volume. Siemens Mobile needs to explain the discrepancy between price and understanding of an affordable accessory (like a Swatch watch, the success idea of ​​which was sold in a beautiful package). The presentations feature research data showing the huge potential of the market. Based on these data, there can be no problems for sales. The stage of active auto-suggestion begins, when the company drives away thoughts that the rough assumptions made at the first stage may turn out to be wrong.

Marketing deals with the cost of fashion accessories at the level of 300-400 Euro, shows that such a price level will ensure the exclusivity of the product, emphasize the difference from conventional phones. Since the price was determined, the last chance to launch sales through the traditional channels for Siemens Mobile has been lost – operators in Europe, retail chains in Asia and Russia. Lack of work with operators also automatically means that the cost of Xelibri brand phones will not decrease, the devices will not be subsidized. The idea of ​​Xelibri collections is designed for an active sales cycle of 6 months, then the old collection becomes a rarity, leaves the market, new phones appear. The life cycle of such an accessory phone in the company is estimated at 12 months.

For comparison: the cost of a fashion device from Nokia at the same time (Nokia 8210, the presence of replaceable panels, the minimum size of the device, attractive design) is about 400 Euros, with a contract with an operator that subsidizes the model, the price drops to 99 Euro. The model has a lifespan of about two years, the device keeps its relevance from the fashion point of view for up to one year (active phase of sales). Even such a comparison shows that Nokia's product cycle is twice that of Xelibri's. Nokia's brand awareness is much higher than that of Siemens, in 2002 the market share of Siemens Mobile worldwide is about 8 percent, for Nokia it is about 36.

Xelibri understands this, but the company's approach to the market is innovative. It was typical for Siemens Mobile to create a product for a certain niche, for example, a phone for businessmen or a device for a youth audience. Xelibri is trying to create a new market segment, a niche. Directly opposite approach, akin to the same Vertu. As long as there are no examples of success or failure of such projects on the market, the Xelibri team acts as pioneers.

Start of retail sales - first collection

The name of the first collection is “Space on Earth”, production has been launched, and it remains only to introduce the new line of phones to the world, as well as the Xelibri trademark. The Macron agency, which has been working with Siemens for a long time, is developing the marketing promotion concept. Based on the input provided by Xelibri, relationships are built with boutiques and fashion stores. When launching the first collection, the focus is not on advertising communications, but on the novelty of products, wide press coverage. The spring-summer collection needs time to be recognized by consumers, so the announcement is scheduled for the end of January 2003, while sales should begin in selected markets in March, in September the number of markets will be dramatically increased. But it all depends on the first sales and how consumers will accept the phones. The company is waiting for the first test by combat.

By the time the first collection was announced, the second series of phones is in the works, it uses the same ideas as in the first devices, there is no technological difference between them. And here comes the first significant moment, on January 27, 2003, Siemens talks about its Xelibri project. Let's remember how it was, let's read the press release:

Siemens mobile has taken a bold step to drive the growth of the mobile phone market by creating a new collection of user terminals that feature original shape and design, feature-rich functionality and are focused on voice communication . XELIBRI will be sold mainly in salons and fashion stores. The company plans to release two collections of these stylish phones annually. In April 2003, the new fashion phones will appear in the UK, France, Germany, Italy, Spain, Singapore, China and Hong Kong, and from September 2003 in Russia and other countries.

In many countries, between 70% and 85% of the population already owns mobile phones, cell phone market growth has slowed, and the mobile industry needs new incentives. Siemens offers an innovative solution to this problem - creating both a new category in the market and the demand of users to own several phones at the same time. And today, when the appearance of the device is one of the most important criteria when buying a phone, Siemens' radical new approach to design is driven by the need of the times.

“XELIBRI is fashionable phone accessories. Today, most people buy the mobile phone that looks best, and many do not miss the opportunity to demonstrate it. Thus, in the future, mobile phones can become the same stylish accessory as watches, handbags, shoes. We foresee that soon people will buy several stylish mobile phones and match them to the mood, color and style of clothing or some kind of event,” said George Appling, president of the XELIBRI line.

Rudi Lamprecht, Member of the Management Board of Siemens AG, commented on the launch of the new line of phones: “The launch of the new brand is an important element of Siemens mobile's market strategy, which divides the market into stylish devices with basic technological capabilities and functional phones. We will continue to develop the latest technologies for both feature phones and mobile applications, network infrastructure, wireless telephony and wireless modules. This bold move will further enhance the value of the Siemens mobile brand.”

Each series of XELIBRI will consist of four phones and will be divided into spring-summer and autumn-winter, as in the field of haute couture. Phones will be produced in limited quantities.

Designed dates for the launch of the collection in September 2003 in other markets - this is a wish, not reality. For example, in the Russian market, models have not been certified, the company's partners have not received samples, and Xelibri insists on selling products not through ordinary retail chains, but through boutiques. The representative office of Siemens Mobile has no links with boutiques, their alignment is a separate and long process, for which there is no time. A technical problem also comes up - it is necessary to add support for Russian fonts, SMS input for phones, if they want to be sold in Russia. Localization takes a lot of time, the company is behind schedule. The result is the lack of finished products by September, by this time the first sales data are already known, they do not inspire optimism. But let's go back to February 2003 and see how the press reacts to the new products.

Xelibri's expectation of interest in new, unusual products from the press was fully justified. In the Xelibri project, this moment was the only one of all that was calculated with maximum accuracy and accuracy. From the side of Siemens, PR is involved at all levels, the president of Xelibri gives endless interviews. The reaction of the press is positive, journalists seized on an unusual novelty, they broadcast Xelibri messages almost without distortion. The idea for potential buyers sounds like this: it's fashionable, it's modern, it's unusual. The first round of the fight for minds has been won, interest in the product is at a high level. The unusual design attracts, people discuss novelties. George Appling says that soon people will have up to 6-7 phones for all occasions, one for cocktails, one for outdoor walks, the main device for work. Dreams sound beautiful, and journalists seize on them, the louder the statement, the more interesting for them.

And now comes the moment of truth - the beginning of sales. Inside Xelibri there is a revival, everyone is in high spirits. The best stores have the entire collection on the shelves, everything is ready for the appearance of the first buyers. Unfortunately, the company abandoned seeding, a free distribution of Xelibri phones among opinion leaders, representatives of the fashion industry. For a brand unknown in the fashion market, this would have been a useful step, but they decided to refuse it, considering the number of publications sufficient to attract attention. Unfortunately, the company did not understand the difference between these two tools, since Siemens Mobile did not have such experience, or it was specific.

The first days of sales began to bring bad news. There was no talk of excitement, sales went to dozens of pieces, and then even the primary interest began to fade away, Xelibri stopped being sold. The results of the first month were not just bad, they spoke about the failure of the line in all countries, the numbers differed slightly and were equally bad. At the end of May 2003, I had a meeting with Rudy Lamprecht, and my attempt to discuss Xelibri sales was met with polite answers that it is too early to judge the results of the first months, Siemens has no data on them. Although at that moment the company hastily changed all their plans, canceled the models created for the second collection, and tried to realize what the positioning mistake was, and how buyers perceive these devices.

In those days, I made a special trip to Selfridges in London to see how Xelibri machines were being sold. They did not catch the eye, they were lost against the background of other accessories, the seller girl could not really tell about their capabilities. From her narrative it followed that these are trendy phones for one reason - they are trendy. No more, no less. There was no interest from visitors to these phones, rare buyers looked at them, turned them over in their hands and put them aside. The product was not desirable, and the average Selfridges visitor had zero or close awareness.

The price has become one of the main complaints from buyers, in their eyes, not very technologically advanced phone was too expensive. The absence of a color screen, the MMS service widely advertised at that time, other functions and, most importantly, the inconvenience of entering text in the absence of a keyboard. People didn't want to buy a phone as an accessory, they wanted to be stylish, fashionable all the time, not just outside of work or in the evening. Studies of a potential niche, the behavior of buyers in it, showed their inconsistency when the desired was presented as real. A bitter lesson for Xelibri. Having abandoned the Siemens audience, which could support the sales of such devices, Xelibri chose a thorny path.

The negative aspects also included the perception of the quality of the handsets compared to similarly priced phones from Nokia. The plastic in Xelibri was perceived as inexpensive, cheap, and not typical of products in this class. But the main thing is that buyers did not perceive the new brand as fashionable, it had no history, they did not see celebrities using these devices, there was no reference point. The Xelibri brand was perceived as one of the new brands with no weight on the market. And for the creation of a segment of fashionable devices, it was a verdict, but the struggle for the consumer has not ended. Siemens Mobile gave another chance to Xelibri, started work on the second collection of devices from scratch.

The Second Coming of Xelibri - Fixing Bugs

User feedback has been taken into account, a step has been taken towards their desire to have a regular keyboard. The decision is fundamental, it puts an end to the unusual design, differences from most devices. All future models, without exception, must have keys. Blurred positioning of the Xelibri ruler.

Another fundamental decision is to work with retail, it is necessary to highlight the phones on the shelves, provide active advertising support in all channels, assure partners that the failures of the first collection will be corrected in a short time. And this is not a metaphor, time is running out, it is the beginning of June 2003, 4 months remain before the retail release of the second collection. There is no time for reflection, it is necessary to act. Design development is entrusted to IDEO, there are no designers and resources within the company. The design is created in a short time, there is no room for maneuver.

The Mother agency is on a tight deadline. It is necessary to create an advertising concept, which was done in less than two months. The name of the ATL campaign is “That’s so tomorrow”, the concept is not new but has not been widely played. The possibility of people in the future to buy attractive shells (beauty body suite) is played up, putting on which a person turns into a handsome man. It is necessary to focus on the key markets where the first collection had the best sales, these are seven countries in Europe. The focus is on the UK, Germany, Italy and France.

Promotion comes through massive TV ads, which are still easy to find on YouTube today, as well as posters that depict the process of transforming ugly people into handsome ones. Lightning, with the help of which they "put on" the second skin, turns into a tattoo, they are distributed in clubs, they imitate advertising.

Another part of the campaign is the distribution of packages for the "second" skin in nightclubs, direct mailing to addresses where fashion buyers live. For example, residents of the Knightsbridge area found such packages near their doors one morning.

Small stands with flyers appear in stores, they are designed to attract the attention of customers.

The press is cooler about the second collection, but due to advertising, sales in the early days are even better than for the first Xelibri, a timid hope appears in the company. The second week of sales brings disappointment, buyers ignore the brand, neither the keyboard nor advertising saves, the product is ignored. Siemens Mobile is not inclined to forgive mistakes, they are considering ways to minimize their losses. Representative offices of the company in countries where Xelibri is not present are given the task to consider the possibilities of selling these devices, they are trying to impose them on everyone. But the representative offices do not want to worsen their performance, as a result, they sabotage the project under various pretexts. For example, in Russia the situation developed in this way.

The volume of the order for the second collection is two times less than for the first devices, about 50 thousand of them were produced. But the first telephones are in stores and warehouses, there are many of them. It is urgent to find ways to sell them. For existing partners, price reduction is unacceptable, b