The ‘black magic’ of handset success

What makes a successful mobile handset? Is it functionality? Hardware? UI? Apps? The right price? Some hard-to-measure buzz? Or the longed-for stamp of teen approval?

As the industry has seen again and again, the answer is: some hard-to-divine combination of all of the above. Which of course is why device makers and operators typically field a dizzying array of devices. The goal is not only to offer something for everyone but also to widen the chance of scoring the next big device hit.

All of this comes to mind this week as Motorola announced a new co-CEO, Sanjay Jha, Qualcomm’s former head of operations. Jha will head Moto’s device unit, which appears headed for a spin-off and eventual sale, the result of quarters of underperformance. Motorola hit a high several years ago with the success of the RAZR, but it’s been all down hill since then. Today, Moto’s handset market share is just 9.2%, with LG (which didn’t even move the dial when Moto was reigning supreme two years ago) nipping at its heels.

In its day, the RAZR had the combination of form, function and “wow” factor that consumers craved. When the RAZR got stale, the company failed to evolve or deliver a successor. And it’s market share crashed. Can it stage a comeback? It’s Q2 success surprised analysts and it is promising an iPhone-competitor (iPhone-killer seems unlikely) by Christmas.

Is it possible? If Palm can make a comeback with the unlikely consumer smartphone Centro, then certainly Motorola has a chance. But even by year’s end, the mobile market is likely to be even more competitive than it is today, with RIM preparing a slew of new Blackberry offerings (including touch-screen and flip phone versions), a variety of vendors reportedly readying the first Android-based models and every manufacturer under the sun – from HTC to LG to Nokia beyond – aiming to take some of the smartphone buzz away from the iPhone.

Ah, the iPhone. The 3G iPhone looks to be a success, but for the first time Apple ran into a number of very real problems with its latest launch, ranging from the very mixed story of the App Store; the complete failure of MobileMe, its consumer synch service; and ongoing concerns about production quality and availability. And all of that comes as Apple inks a deal with AT&T to keep the iPhone as an AT&T exclusive (in the U.S.) through 2010 and rumors of a product-line broadening iPhone Nano make the rounds.

Will this combination of problems and potential problems derail the iPhone? Will another phone step up and take its place as the “it” device?

If the history of the mobile device industry holds, the only certainty will be uncertainty, along with an alchemic mix of black magic that will help to crown winning devices that will only seem obvious in hindsight.