Virgin branches out into electronics gear
Thu Oct 16, 6:26 AM ET
By Edward C. Baig, USA TODAY
Sir Richard Branson wants to sell you a low-cost MP3 player and a cheap airline ticket. It's all part of the charismatic 53-year-old Virgin Group founder's grand plan to conquer the American market. (Chat transcript: Virgin founder Richard Branson)
The British billionaire was in town to celebrate Virgin's new line of 15 electronics gizmos, ranging from a $40 portable CD player to a $500 portable TV/DVD.
The products, which carry the Virgin Pulse name and same silver shade as on Virgin Atlantic airplanes, are being exclusively sold in Targets and Virgin Megastores. The launch comes 18 months after Virgin, with partner Sprint, started selling cell phones. Almost 1 million subscribers have signed up.
Branson's challenge with Pulse is to thrive on a low-margin battlefield dominated by the Sonys and Panasonics of the world, and getting ever-congested with newbies such as Dell and Gateway. He hopes Pulse engenders a warm, fuzzy feeling that extends to other Virgin brands. "If somebody buys one of our electronics products and likes the experience, they're more likely to fly on our airline," he says.
Virgin has always taken a venture-capital-type approach to business. For all of Branson's successes with airlines and records, other pieces of the empire have sometimes sputtered. But Silicon Valley-based tech analyst Tim Bajarin thinks electronics will succeed. "Like (Apple Computer's) Steve Jobs (news - web sites), Branson has the golden touch. ... When he puts his money and power and marketing dollars behind something, he makes things work."
The rest of Branson's American assault will come from the skies. He is uncharacteristically cagey when it comes to specifics for Virgin USA, the low-cost airline he plans to launch next year. As a foreign entity, Virgin cannot take a bigger than 49% stake, so Virgin must have a partner. "I'm going to be killed for saying this, but it will be a fully frilled low-cost airline."
Branson is not sanguine about saving the supersonic Concorde. His offer to rival British Airways of 1 million pounds per plane (about $1.7 million) was soundly rejected; and Air France wouldn't take his calls.
Branson is banking on a friendlier response in the USA. Among the new Pulse entries is a stylish alarm clock. The Virgin boss winks at the marketing possibilities. If it wakes you, Branson says, "Virgin is the first thing you're going to think of when you get up in the morning."
