Monday, May 19, 2003		Feature

Shall I wear diamond cellphone tonight?
Baker Li

Michael Mou, chairman of Taiwan mobile phone maker DBTEL, displays the world’s most expensive cellphone in Taipei. Mou hopes the diamond-studded phone, with a staggering T$1 million ($ 28,736) price tag, will boost DBTEL’s brand recognition in the saturated handset market.

ASK the young and fashionable in Taiwan if they’ve heard of DBTEL Inc. and the answer will likely be no. But mention diamond-studded cellphones and eyes gleam and heads bob in recognition.

Without a household name such as Nokia or Motorola, DBTEL’s strategy for survival in a saturated global handset market is to turn the mobile phone into a luxury fashion item, says DBTEL Chairman Michael Mou.

His company, Taiwan’s largest own-brand handset maker, launched a series of handmade diamond phones a few months ago, including what Mou says is the world’s most expensive. The gold-coloured item with a sparkling diamond-encrusted flip cover and a three-carat centre piece costs T $1 million ($ 28,736), or about twice as much as a family car in Taiwan. "We view the mobile phone as very personal stuff and it’s a fashion statement for many, like watches and clothes," said Mou, 53, sporting a gold watch himself.

"Once people start to worship a brand, they will do whatever they can to own the products under that brand," the five-foot-tall executive with a booming voice told Reuters in a recent interview at company headquarters in Taipei. While few can afford to buy diamond handsets-the cheapest costs a cool T $ 30,000 (US $ 862) — the precious, colourless gems get the attention of shoppers.

Taiwan is a particularly competitive cellphone market as it has about as many phones as people-giving it the world’s highest penetration rate, analysts say. That’s because many people own more than one mobile phone. "Luxury handsets have a different value if you can see these diamonds sparkling," says Wang Yu-yiao, 27, peering into DBTEL’s window display in a popular shopping area in Taipei. Pondering a diamond-encased phone with a swirling black and white design on a big screen TV, the magazine editor said she would consider buying one as a birthday gift for her best friend.

DBTEL is not the first to promote mobile phones as status symbols for the very rich. Nokia, the world’s top mobile phone maker, set up Vertu last year that sells a platinum-encased handset for about $ 23,800.

DBTEL declined to say how many diamond phones it has sold, but analysts say they are just gimmicks.

"Sales of these expensive mobile phones will be limited," said Kevin Lin, fund manager at Shinkong Investment Trust. "Basically, companies are not going to make lots of money from them and what they want is to promote their names." As brand recognition grows, it will be much easier for companies such as DBTEL to sell other products, said Lin, who helps manage $ 580 million of funds for Shinkong. Like other Taiwan phone makers, such as the largest, BenQ Corp, which generates more than two-thirds of revenue from contract manufacturing, DBTEL also sells cheaper, low-end models.