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The Return of the Candy Bar?

Once the de facto form factor, the candy bar has had to traverse a rough road in recent years. While new handset models, such as the Motorola SLVR and ROKR E1, Sony Ericsson's Walkman series, and Nokia's 6682 and 3230 have entered the market, some question whether these new riffs on an old theme can push the candy bar form factor back into popularity.

According to NPD’s consumer data, the candy bar is the second-most popular handset shape today, but still lags far behind the clamshell/flip devices. Approximately 19 percent of survey respondents in 2005 reported purchasing a candy bar handset. While this incidence is significantly lower than the reported number of clamshell or flip phones, which have slightly more than 54 percent of the market, the increased number of new, stylish, feature-rich candy bar devices could mean we will see some growth for this form factor in 2006.

In essence there has been a real and noticeable shift in consumers’ preferences with regard to device shapes. According to NPD data, in 2002, candy bars made up roughly 58 percent of handsets sold, while clamshell/flip phones comprised just 30 percent of the market.

The real shift in form factor preferences took place in 2003 and 2004. In 2004 and most of 2005, candy bar handsets were relegated to the bargain basement, no frills section of the carrier’s selection.

At the same time, the average price for the candy bar form factor has lingered at the low end. In 2005, the average selling price (ASP) for clamshell/flip phones was $67, while the candy bar came in at a much lower $46.

Why Candy Bars Slipped

There are several reasons why the candy bar shape has slipped in recent years, including the following:

Lack of features – Go into any wireless carrier store today, and the candy bar phones will be among the most basic models available.
Fashion statement – Today more than ever, mobile phones are fashion statements. Because handset manufacturers ignored the candy bar form factor for so long, it has become passé.
New form factors – Different form factors such as smartphones/PDAs, sliders and twisters and even lipsticks, have made the marketplace more dynamic and complex.

The end result of this neglect has been the decline of the candy bar form factor’s allure. This decline in popularity has led to a shrinking market share for some handset manufacturers. For example, the lack of clamshell models, coupled with an unwillingness to innovate on the standard candy bar design, has contributed to Nokia’s U.S. market share declines in the last few years. Meanwhile, vendors like LG and Samsung offered more clamshells and saw their market share rise during this time period. A clamshell-focused portfolio has contributed to a similar resurgence for Motorola.

Some Favorable Dynamics

The candy bar has far to go before it truly comes close to challenging the clamshell devices; however, there are several dynamics working in its favor. For instance:

Some consumers who buy candy bars like more than just the shape. They tend to like the durability this shape provides– anyone who has had a clamshell or flip phone come unhinged or break in half can attest to the benefits of the candy bar form factor.
Some buyers like the simplicity of the candy bar shape. This preference is especially evident in Europe, where the market supports more candy bar devices than in the U.S.
Handset manufacturers are working to put more features into candy bar handsets – examples include the Ericsson Walkman line of music-capable devices and recent Nokia phones that boast higher resolution cameras.

Bottom Line

The bottom line is that the wireless market thrives in part due to its diversity, from air interfaces to handset form factors. While it’s unlikely the candy bar shape will ever regain the top spot it once held during the early part of this decade, if done right, the candy bar is poised for a significant comeback.

-- Charul Vyas, Senior Wireless Specialist