While dropping by a Brooklyn Cafe my eyes glanced on a copy of Saturday’s New York Times Technology section with an article about Cellphone Envy Lays Motorola Low ; the article has a interesting finding - the cellphone business has more in common with the fashion business than the technology/gadget business. According to the New York Times article:

Today, a phone’s value reflects not so much what it can do, but whether it is the envy of friends and colleagues.

“..When the sleek Motorola Razr V3 cellphone first hit the stores just over two years ago, it carried the price tag of a must-have status symbol: $500. Now? About $30 with a two-year service contract.

Motorola’s fortunes have plunged along with the price of its Razr. Its profits have collapsed, and it announced plans last month to lay off 3,500 workers. Since last October, its stock has dropped 30 percent….”

“….Just like fashion houses that shamelessly copy each other’s styles, rivals have also swarmed to duplicate the Razr mystique, flooding the market with thin-phone clones. Last year, Samsung unveiled the 6.9-millimeter-thick SGH-X820, which analysts called the ‘Slvr-kllr’ because it is 40 percent thinner than Motorola’s skinniest handset”.

However, it’s less and less likely that consumers want to spend several hundred dollars on a new cellphone:

“….The larger question is whether the cost-conscious majority will still pay the kind of prices for phones that once burnished Motorola’s profits. Most consumers are now on their fourth or fifth cellphone, and implicitly understand that technology is quickly improving and wireless carriers are constantly slashing prices.”

Link: New York Times