Telephone makers plug into profits with an array of new products.
Like the bathtub, a telephone can be found in nearly every American home, and, until now, it has been equally taken for granted. Yet, all of a sudden, consumers are being urged to jettison their old view of the phone as a utilitarian item and look at it as a fancy new entry on a shopping list. Local Bell System companies, as well as AT&T's brand-new baby, American Bell Inc., are beseeching customers to buy telephones instead of leasing them, and even to plug more of them into their homes. Department, specialty and discount stores are getting into the act too, stacking shiny new phones next to the portable TVs and toaster ovens.
For many people, used to buying a hair dryer but paying a monthly charge for their phone, the changeover is bewildering. Says Michael J. Friduss, an Illinois Bell executive: "We had a tremendous rush of people thinking that this was their last chance to get a new phone. Some customers thought we were going out of business, or that we were not going to repair their phones any more." That is not true—phone customers can in fact keep leasing their phones and getting repair service from their local Bell office—but the confusion is understandable. Although owning a phone has been possible since 1968, when the Federal Communications Commission started to unravel A T & T's monopoly on telephone service, many people still believed it was illegal.
Last year, while 25 million people acquired leased phones, only 5 million purchased them. Now the confluence of Government-ordered deregulation and the breakup of AT&Tis changing all that.
This year the number of Americans buying phones is expected to double, to 10 million. With 80 million households now potential customers, more than 100 manufacturers of telephone sets, including such giants as International Telephone & Telegraph and General Telephone & Electronics, are fighting for a share of a new market that is expected to reach $600 million this year and many times more than that by 1986. Says Harold Miller, ITT vice president for telecommunications: "Within the next three years, whether you like the idea now or not, you are going to own your own phone."
Fortunately, this free-market competition is paying big dividends for consumers. In shopping for new phones, buyers can indulge their tastes for the fashionable or merely eccentric and choose from a variety of helpful features, like automatic dialing for frequently used numbers and speaker phones. There are phones that carry the imprimatur of high-fashion designers, hide in leather boxes or chime instead of ring. Prices range from $15 for a non-Bell version of the standard rotary dial phone in basic black to the "Elephone," a unit encased in a silver-plated elephant's head that costs $2,150.