Like its two main competitors Nokia and Motorola, Ericsson is a corporate giant. These “big three” manufacturers dominate the global mobile phones market. As mobile phones moved from being a tool for business to a vital part of social interaction, the strategies of each company have been markedly different. Motorola has chased technology, concentrating either on small size and high performance or low-cost handsets. Ericsson concentrated on speech technology and Nokia dialled desirability into its offering, a design-led approach that put it out in front.
That many companies think about technology first is hardly surprising. The effort and investment required to get a mobile phone into our pockets is huge. Ericsson has been at the forefront of technical performance, but that’s not always such a tangible proposition for the customers. In terms of grading performance, we’re more likely to notice the look and feel, as notice the clarity of the call.
Which is where Nikolaus Frank comes in. In a move designed to signal the shift from a technology perspective to softer, consumer-focused company, Ericsson has just appointed him to its management team to head up product design. It’s a strategic decision, putting design at the top of the company’s agenda.
Coupled with a brand new design centre at its headquarters in Lund, Sweden, Frank’s appointment sends a message inside Ericsson that cultural changes are underway.
The size of the global market has fuelled intense competition just behind the “big three”, and amid media reports of a dwindling market, pressures are on all three to slow development into next-generation phones, realign their competences and keep profits up as growth slows. So just last month Ericsson became the first to announce that it was to abandon manufacture of its handsets and buy in from a Far East manufacturer. How does this fit with the new alignment to design?
“Product design, development and intellectual property is what Ericsson will be about,” says Frank. In this it mirrors virtually every global technology and automotive manufacturer in sourcing an offshore OEM [original equipment manufacturer] to provide the hardware, leaving Ericsson to sort out how to design and market in a consumer-driven marketplace.
“I see myself as the users’ advocate,” says Frank. His background as a product design consultant in Sweden for 13 years working on transport and consumer products for clients in the US and Asia, including a collaboration with design consultancy Ideo on a project for Amtrak, means he has experience of engineering and technology development. “The heritage of engineering is very strong, but the Ericsson culture is generous and enabling. There are many brilliant people in the organisation, the trick is to move them together around the design centre space.” He describes the design centre as a cultural hub where the design and engineering cultures can mix and get on.
Frank plans to build the skills of the design team, not the (undisclosed) number of designers, with the “skillful and brave”, moving towards a multidisciplinary approach combining the physical and user interface design issues. The momentum is high, with the design building completed in two weeks and a number of key products underway. “Of course, it takes time to see the changes, but over the next few years we will see a big change in Ericsson’s products,” he says.
So what direction will Frank be taking? The industry has traditionally been driven by the technology and the assumption that small is beautiful. The drive to M-commerce, where our phones would function as information and transaction devices with access to the Internet, led us through the unpleasantness of the Wap phone. Technology, and certainly the interface, were not ready to deliver the predicted revolution. Despite a bad start, IBM predicts that the wireless market will grow in size from it’s current $3bn (£2.1bn) to $33bn (£23.1bn) by 2003 and mobiles will eventually replace PCs as our favoured portal to the Internet.
But user disappointment with technology has led Ericsson’s neighbour and arch competitor Nokia to delay development of it’s G3 (third generation) handsets, and the talked up scenario of instant Web access. High speed connections remain unseen outside a laboratory.
Ericsson has leapt headfirst into the space that G3 will eventually occupy, with one of the few real “smart” phones that combine the personal organising functions of products like Palm Pilots and a small lightweight mobile phone. The large screen allows better Web presence, and the hinged flap keeps the phone a phone when that’s what you want.
For Frank, phones will probably eventually disintegrate into earpieces, microphones and screens, but he’s not sure that the ultimate format is really understood. He feels, as Ericsson has always maintained against other trends, that phones are for speech first, and that is their most effective communication method. Text messaging happened, almost by accident, but it’s not something that will change the phone.
To help him develop his vision of the future, Frank plans to work with external designers in tandem with as his core team. Ericsson has worked with a number of external designers and he has no intention of changing them. “It’s important to have a dialogue with external designers, only do that with a strong sense of your core values. Those designers we have worked with know the culture and the values of Ericsson. It’s not good to change the designers just because their contract is over,” he says.
At the core will be his in-house team. He sees his main value as an agent to bring design tools that create a consumer-focused organisation driving technical and engineering development. With design studios around the world designing for local markets, how does Frank plan to co-ordinate a consistent design message? “You have to respect local design influences, but ensure that they are tapping into the core values,” he says. It’s a common problem, solved either by prescriptive design guides that limit creativity and don’t adjust to changing markets, or at the other extreme by abstract concepts that can be interpreted too generally.
Frank is passionate about the user and sees that passion as essential to Ericsson’s future. But Nokia and Motorola probably say the same things, so what will be special about Ericsson that will give it the competitive edge it is looking for design to deliver?
“Looking and listening is essential, we need to look at customer’s behaviour, but it’s how we respond that will be special. There is a lot of uncertainty about the future formats of phones, it could go a number of ways. Our technical performance will always be crucial,” he says.
It’s a truism that when companies are in trouble, they get the designers in. Value has to be added at the core and it takes a long time to come to fruition. It’s easy to assume that Nokia’s connection to the emotional, social and fashion elements of mobile phones has been a strong component of their success, and Ericsson is changing its ways too late.
Frank’s position reflects an increasing trend in the US, where large companies are developing leading edge corporate design teams to develop a strategic position on design, through the differentiation and then delivery of products and services. In Europe, Philips and Siemens have had a historic belief in in-house design that can, as Apple Computer did in the US, attract highly creative people and allow them to work in a service and manufacturing environment. These teams define the future of the company, experience prototyping values and products, to develop the experiences that develop intangible things like brand.
But for Ericsson to appoint a designer at a strategic position within the company is an important and brave move. The effect will not be just in the shape of the handsets or a good interface. If Frank is successful, the culture of Ericsson will change. One of the most important roles of design, with a small “d”, is to stand at the focus of a company’s activities and at the point of contact with the customer. You can argue that’s what sales and marketing do, but they can’t look ahead, or convert knowledge into opportunity and vision, as the design process can. For management to realise, that is important. Frank’s challenge will be to work the strategic vision through the troops, steeped in the excitement of breakneck technical development that the industry has had to sustain to survive, and make them understand who they do it for and what they are looking for. Wish him luck.
Clive Grinyer is director of design and innovation at the Design Council