Headlines this week confused many market observers when some suggested that a beverage company was getting into the business of making cell phones.
In fact, Pepsi’s foray into China’s competitive mobile phone sector is a licensing deal, according to a Forbes story. The Pepsi-branded phones will be made by a well-known manufacturer that has similar co-branding deals with other major companies.
The story began with several posts on the Chinese “Twitter” site Weibo, which implied that the soft drink company would be making smartphones for the Chinese market, with models starting at about $200. The blog posts suggested the phones and related accessories would be made available as early as next week.
It later became clear that the Pepsi-branded phones will be made by the Chinese firm Wanfeng Technology. Wanfeng is simply licensing the Pepsi name, likely for a significant price, in order to attract buyers in the hyper-competitive Chinese cell phone market.
Wanfeng already has similar licensing deals for making branded smartphones with Hello Kitty, Konica Minolta and other major companies.
Other than the soda-maker’s name, the Android-based Pepsi phones have few significant features that can’t be found on other smartphones. While the initial buzz may create early sales, analysts say they don’t expect that cola-labeled cell phones will have much staying power in the cut-throat Chinese technology market.