The Future of Design

The Future of Design
Upstart Cellon has a business model that puts it at the heart of the handset value chain. What comes after cell phones?

Kitchen appliances turned Haier into a household name in China. Its refrigerators sold so well that in 2003 the Haier Group leveraged its newfound brand equity to move into mobile phones.

Today Haier-branded handsets are selling briskly on the mainland. But the company has no mobile-phone division. Its handsets are conceived and prototyped by Cellon International, an independent design house. Cellon contracts with Haier and sends the design, along with a negotiated bill of materials, to a contract manufacturer. Then Haier's sales, marketing and distribution turbines start churning.

Order the phones, slap on the brand name and pour them into the channels. It's not exactly that easy yet, but Cellon represents a giant step in that direction. Indeed, the company is positioned at the center of the global product value chain--both design and supply chains--and, as such, it is reshaping the way products are designed, made and sold.

Cellon is the largest design house in the handset business, but others are emulating the model, including Finland's Elektrobit Group plc, Korea's Bellwave Co. Ltd. and Israel's AlphaCell Wireless. And while design outsourcing has been used primarily for mass-producing cell p