The Pepsi Challenge

No, Pepsi Isn’t Really Getting into Smartphones

Designing a handset used to be a big deal. Some serious research, development and money went into each new cellular device. Hardware, software and sourcing were all challenges. Then came months of testing and complex certification procedures.

That was then. Now, it appears you can slap a logo on a cookie-cutter device and you’re in the phone business. It’s not quite that simple, but it’s getting close.

Reuters is reporting that soft drink maker Pepsi will indirectly enter the Chinese Android phone market through licensing deals with a local manufacturer. A story on MobiPicker points to a rather vanilla Android phone: a 5.5-inch 1080p display, 1.7 GHz processor, 16GB internal storage, a 13-megapixel rear and a five-megapixel front camera. There might be Pepsi-themed backgrounds, but the software appears to otherwise be stock Android. MobiPicker says the phone, the Pepsi P1, will be priced at about $205.

Of course, this isn’t about Pepsi diversifying into a new industry but rather about the company using its recognizable name. Brand consultancy firm Interbrand says the Pepsi logo is currently ranked as the 24th most valuable in the world, at about $20 billion. The company’s colours and fonts are well known in China and across the globe.

There aren’t details on the licensing deal but, for Pepsi, it’s a way to keep its logo visible in more places. Each time the user checks their phone, they’re selling a drink.

This isn’t unprecedented — we’ve seen similar licensing deals from fashion labels, consumer brands and even electronics makers. There are Alcatel and Philips smartphones, and there have been deals with Ferrari, Jeep, Kodak and Levi’s. Brands provide an emotional attachment for buyers.

Pepsi isn’t getting into the smartphone business even though there will soon be a Pepsi Android phone. It’s just as Pepsi isn’t in the apparel business despite plenty of Pepsi t-shirts around. It’s a matter of licensing to utilize corporate goodwill. The Android smartphone industry, it seems, is the new t-shirt market.

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