By Brendan I. Koerner
For this week's column, I'm gonna ask y'all to jump in my Frink-worthy time machine and journey back to a bygone era: the halcyon days of late 2004. Ah, what a glorious time it was to be alive—the winds of change were blowing through the Ukraine, Ken Jennings' reign of terror on Jeopardy! came to an end, and Ireland had yet to fully adopt the metric system. But above all, the Motorola Razr V3 went on sale, for the whopping sum of $500 (after rebate!). Beyond my cheapo means, no doubt, but at least it was a Great Leap Forward for handset technology, right?
So how did the $500 Razr, the must-have for slinky models and the fat cats who love them just two years back, become today's $29.99 Razr, the default phone for pretty much everyone? Or, more succinctly, how did the Razr get so low-end, so fast? Though the economies of scale and the high-end trend toward data phones played their roles, I'd argue that the Razr was always the proverbial perfumed pig. And therein lies an important—nay, life-or-death—lesson on what really separates the pricey from the cheap. PLUS: A shameful admission about goofing on the Shuffle.
First off, perhaps some of y'all with short memories don't recall the Razr's initial incarnation as a luxury good. But indeed it was so—the slim handset was pitched as the mobilecomm equivalent of an iced-out watch, sure to spark envy among your less with-it pals. The Razr was also supposed to pull Motorola out of its sales doldrums, by helping it recapture the innovative rep it earned with the StarTAC phone way back in 1996. The company poured a lot of money into a clever promotional strategy, getting it into the hands of famous designers, celebrities, and their collagen-loving ilk. Tough to fathom, but folks actually debated over whether to plump for a Treo 650 or the Razr V3—even if they knew the former's obvious data advantages, the Razr's thinness still wowed 'em. And, hey, the prices really weren't all that different in those early days.
So what happened? Less than two years later, the wireless carriers are practically giving away Razrs—Verizon gave me one for $29 when I reupped my contract, and I just saw an ad pitching $49 Razrs for new customers. Okay, I know what a lot of you are saying—those phones are subsidized by the contracts. But that's a straight-up apples-to-apples comparison with the initial Razrs, which required two-year activation with Cingular. And, hey, let's look at the prepaid Razrs out there—this unlocked Razr is $159, and that includes the Mobile Phone Tools software (which Verizon wants me to fork over $39 for—right). Pop in $50 prepaid SIM card, and you're good to talk for a long, long time without getting hooked into an onerous contract.
The bottom line is, those folks who a) paid $500 for their early Razr and b) are still hooked into a Cingular contract as a result have gotta feel ripped off. The question is, was there any early hint that the Razr would become a low-end staple in less than two years? Or was everyone just so bewitched by the handset's unprecedented slimness that they didn't bother to step back and say, Hey, I'm paying a Treo-like price for a phone that lacks a QWERTY keyboard, a video camera (on the initial V3 model), or even a headphone jack—what gives?
An even more intriguing question is whether Motorola foresaw the incredibly rapid low-ending of the Razr back in 2004. Having fallen to number three in the handsets market at that time, they obviously needed a hit, and a high-margin hit at that. The Razr certainly did the trick, and you might argue that Motorola was able to bring the price down quickly as a result—y'know, that old chestnut about the more you manufacture, the cheaper the product gets. But let's face it, Motorola is run by some sharp cookies, and they knew that the initial premium they were charging was ridiculous even by the tech industry's oft-ridiculous standards. The company's Razr PR campaign succeeded where the Moto Pebl's failed—to be blunt, it managed to position the Razr as a phone that would help get you laid. (The Moto Pebl campaign aimed for this in a much more subtle way, but ended up coming off as the phone that will turn you androgynous.)