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The birth of a cell phone

How do phones end up in a carrier's lineup? Who picks the color, and who sets the price? CNET's Jessica Dolcourt sits down with some folks behind the scenes to answer these questions and more.

How does a cell phone become a cell phone? More than just processors and plastic, most cell phones in the U.S. owe their existence to the behind-the-scenes collaboration, and sometimes conflict, of the carriers and manufacturers that create a concept and design long before a smartphone or flip phone emerges from the factory.

How do phones wind up in a carrier's lineup, how long does it take to get a phone on the market, how is price determined, and what kinds of problems can delay a launch? In an effort to answer these common questions, I sat down with a hardware designer, an interface designer, and a product manager, respectively, who have all been on the front lines.

While all three wish to remain anonymous for this story (as does the subject for Tuesday's candid interview, "Confessions of a cell phone designer"), they have a combined 25 years of experience working for major carriers and manufacturers and they know a thing or two about what it takes to bring a phone to life.

In the beginning

A cell phone's development usually plays out as one of the following two scenarios. Most often, they're designed and spec'ed-out by the original equipment manufacturers', or OEMs, portfolio planning team, then pitched to carriers.

More rarely, the carrier will ask the OEM to codesign a handset that carries much more of the operator's branding and influence. This second scenario applies to the T-Mobile Sidekick and MyTouch families of smartphones and most likely to the Verizon Droid family, although Verizon didn't respond to our inquiry on the matter.

Scenario 1: A briefcase filled with phones
This story starts with the sales pitch, either quarterly or biannually, between and OEM and a carrier. The phone maker carts in "literally a briefcase filled with phones," according to several sources who attended one carrier's meetings. That begins the big sell, a polished presentation of the phones' various features, their intended audiences, and the market trends that support the specs and design decisions. A carrier could see anywhere from one to eight phones per pitch.

After the sales pitch, the carrier's product team needs to decide which handsets make the cut. They'll pore over the paperwork, which includes specifics on the phones' construction material, and evaluate the prototypes, if there are any. Industrial designers might also be called on to earmark design concerns and propose slight changes to promising handsets, differences that could include color styling, the shape of a speaker or finish to the back cover, even a shift in intended audience--for example, a model the OEM pitched as a business phone that the carrier thinks would sell better to a broader group of text-heavy users.

Making a cell phone on Dipity (press '+' to expand).
[Editors' note: This is an approximate timeline that simulates a launch schedule; it doesn't apply to any single carrier or phone.]

Once a carrier commits to a handset, the real negotiations begin. The OEM and carrier need to hammer out how many units the carrier will buy, the price of each unit (more on this later), and those proposed changes. All three factors can elicit strong opinions on both sides. Most phone designs stem from the OEM's research into color and design trends, usability studies, and market conditions, figures that their analysts pore over that influence everything from the shape of the phone to the placement of the accent elements. At the same time, the carrier has run its own studies and reports about its customers. It would be rare for both to share their competitive information, and without being able to see the deeper numbers, each side is essentially asking the other to take their word, even if it contradicts their internal intel.

"I think it's this constant power struggle between the OEM and the carrier, so they both have their brand in the forefront," one source said. "They want to keep customers."

The launch date also is a concern. "Most people think we make a phone and it's out a week later," a designer said. Instead, the process can take a half a year to a whole year from start to finish.

"How can you possibly design a phone that will look good a year from now? It's really hard." In addition, market pressures like pricing can change, and if a launch schedule gets delayed, a rival with newer technologies could devalue the phone before it ever appears on a shelf. (The tardy Motorola Droid Bionic is a god example.)

Over the next approximately four to nine months, meetings between the two camps continue with increased regularity and focus. They'll negotiate more and nail down the phone's physical and software details, getting as granular as which preinstalled third-party apps get the green light. As the launch date looms, the two sides meet as often as every day.

When the design is at last bolted down, the carrier starts testing a few phones in-house. Made as one-offs, these test units can cost thousands of dollars apiece. Testing on both sides is meticulous, something similar to what CNET Senior Editor Bonnie Cha explained here, although one source enjoyed the process. "Testing in general is fun because you always find bugs." Another found it more tedious.

After this approximately four- to eight-week testing window, the carrier signs off on the price, the final design, and other important tests--like making sure the handset is optimized for the carrier's network--and the manufacturing can now get under way. It can take another three to six weeks to gather and distribute the devices through the sales channel until the official launch day.

Scenario 2: Codesigned phones
As long as it takes to get an OEM-designed phone out the door with few adjustments, just think how many more hours are needed to create a carrier-initiated phone like the HTC-made T-Mobile MyTouch 4G Slide. In this case, the carrier and OEM's in-house designers need to come to an agreement on every detail, a give-and-take that can kick up a lot of dust.

As you'll see in tomorrow's interview, friction can come from any part of the design and production schedules, and it doesn't help that both sides jealously guard the results of their market trends studies, sales figures, and user testing results. At the end of the day, however, the carriers and OEMs will come together on a final version, since selling phones is the higher goal.

It's usually the carrier who gets the final say, two sources independently said. From the carrier's perspective, "ultimately you're the client and you're buying all the phones, so [the OEMs will] do it eventually, but it [can be] really painful for everybody involved," a source said.

More factors in play

There's no way to share all the steps and nuances without keeping you here all day, but here are some answers to a few more burning questions.

Samsung Galaxy S II profile
Thin is in. Josh Miller/CNET

What's with all the delays?
The launch schedule is incredibly important, as all three sources independently emphasized. With so many steps in the process, delays can come from anywhere. For example, if a carrier requires a new hardware or software feature a little later in the process, it could push the schedule out by days or weeks as both sides put in the hours to apply the change. That's a problem for the OEM. "If the schedule is affected, [you might] remove an entire feature that's not a key selling point" in order to deliver the device on time, a source said.

Other times, delays stem from design problems. "Sometimes the phone that would show up in the suitcase...would be developed, and [the OEM] might change enough of the goodness that the executives would no longer want it," one designer said. "What can we do to get back to that original intent?"

Other times, phones are intentionally delayed while the two camps iron out their differences. "Things get reprioritized all the time by the business," said the other designer. "Priorities shift or decisions are held up--we can't agree on the form factor; we can't agree on the price. The product manager might say, 'OK, hold off on the design for now. We're not sure this is going to happen. We're not sure what all the features are.'"

Do phone makers ever plant leaks?
According to one source, leaks can occur anywhere along the production chain, but they're not marketing ploys. "Leaks are horrible," the product manager said. "Especially when they're leaking early prototypes, there are [still] problems with the hardware, the appearance is off. You may be changing a large part of the phone [down the line]." Those changes might not align with customer expectations, and the proposed launch date might change. Those factors, combined with what could be a rudimentary design, can cause criticism among customers that both the carrier and OEM will have to work harder to shake.

How are phones priced?
If you think $80 for a midrange smartphone is costly, consider that a carrier might have to pay $299 for each unit of the exact same model. The more money a carrier can make back by selling you a recurring data plan, for instance, the more it can drop the hardware price. If the carrier doesn't pitch in bucks to market the phone, it also can divert those marketing dollars to increase the subsidy. Yet, if both sides share advertising costs, there will be less budget left over to subsidize the phone. Prepaid carriers use a different model. They don't subsidize the cell phone cost, and instead offer an all-inclusive monthly rate that may be lower than those of the big-four U.S. carriers. As a result, prepaid carriers aren't always in a position to offer the top-of-the-line phones, especially to their budget-seeking customers. "Those prepaid guys are extremely cost-sensitive," one source said.

Do OEMs play favorites?
Sure, if you ask the people I interviewed (reminder: they are not official company spokespeople). Manufacturers are interested in selling by volume, so they may give larger carriers Verizon and AT&T the first pick, then work their way down. Sometimes, carriers that push back can successfully negotiate for more preferred handsets for their lineup.

Is thinner better?
Aesthetics are subjective, of course, but our social obsession with razor-thin phones is a pet peeve of the industrial designer I interviewed, especially when the decision to follow a design route is handed down by the management, not contributed by the designer.

"I think a lot of ID [industrial design] people want to see differences in the phones. There's a lot of pressure from execs just to make it a black box. As small as you can." That shouldn't be the case, the designer says. "By adding 0.5 millimeter in a dimension, you can get a nice, sculpted back, but I think with phones, people are so hesitant."

Pantone iPhone app with color charts
Pantone iPhone app with color charts

Who picks the color?
Again, negotiations come into play. While the carrier ultimately selects the color, it's likely choosing from limited options. "Each manufacturer has its own paints and suppliers," the industrial designer said in our interview. "I couldn't go in and say, 'Here's the exact Pantone chip; I want this exact color.' It might be more like, 'We're looking for a bright yellow and here's a board of images that show people carrying [yellow] purses...and we want to try to translate that to [the phone].'"

If a carrier can't work out an exclusivity deal for a handset, it might be able to corner a color, so that color family would be out for rivals with the same handset.

By the same token, most cell phone owners prefer black, a source suggested. In addition, carriers and OEMs "don't often want to hold multiple colors," the product manager told CNET, since there's more inventory to track in a warehouse and more SKUs to handle. The fact that we do often see multiple color choices for some handsets is a testament to the carrier's sway in phone design.

Read more
It's often said that a cell phone is a personal device capable of eliciting strong emotions from its owners. That's also clearly the case with the many people involved in creating the phone. The path is long and disagreements can occur at every stage: between the carrier and the manufacturer, between executives and designers, and even among designers within the same company. To peer further behind the cell phone curtain, stay tuned for tomorrow's candid interview, "Confessions of a cell phone designer."