The Digital Skeptic: Will.i.am Brands Show Just How Hard It Is To Get Paid

NEW YORK ( TheStreet) --Andrew Smits is a big fan of Will.i.am. But when it comes to the gadgets the musician-slash-entrepreneur is spinning up, we agree they probably "Will.not.work."

"The youth market is not the wide open blue water people think it is," Smits told me a few weeks back over drinks and finger food.

Smits is no idle fan boy. He's creative director of Concept 73, a San Clemente, Calif.-based marketing agency with serious chops selling action brands such as Rip Curl, Simple Mobile and Vans to kids.

He and I were at an industry confab trying to get our brains around how celebs such as Will.i.am., the Black Eyed Peas producer and early collaborator on the Beats by Dre line of headphones, are swimming into ever-odder consumer electronics waters.

Late last year Will.i.am rolled out what had to be the oddest device of recent memory: a clip-on smartphone camera lens case called the foto.sosho. The unit is designed, built and wholesaled by Will.i.am -- or William Adams, as he is known to his parents and the IRS. And it slots over an iPhone to extend its imaging features. High-end U.K. retailer Selfridges & Co. retails it for a stout roughly U.S. $480. Wider global release is expected later in 2013.

And no question, Mr. Adams is a legit master in cross-platform media jujitsu needed to get such a device off the ground.

"I travel a lot. I'm sponging all the time. I am a 'popthroplogist,'" he joked during the International Consumer Electronics Show as he explained his vision of entrepreneurship on stage during an event at the Las Vegas Hilton.

Back in 2003, he got it that the Black Eyed Peas track Hey Mama was hotter tied to a hip iPod commercial than as mere music on radio or the Web. He was early to leverage music's brand power to spin up electronics brands such as Beats by Dre, which sold to recently to HTC for $300 million. Will.i.am evens sells his insights to the Fortune 1000. Intel ( INTC), Dell ( DELL) and Coca-Cola ( KO) take serious bets based Will.i.am's advice. Witness Coke's launch of the Ekocycle brand, which supports products made from recycled material. Fortune magazine went so far as to plop Will.i.am on its January cover as "Corporate America's Hit Machine."

"Starting up a product was easier than I thought," he told the crowd.

That all may be true. But one does not need to be a new-media Will.i.am to see the chance that an iPhone add-on -- or the larger trend of betting on said celebrities as gadget rainmakers -- making any real money is almost incomprehensibly small.

"Will.i.am is definitely a success story in making money in the music business," Smits said. "But selling pricey iPhone parts, that's going to be a challenge."

One-hit tech wonder
Will.i.am's -- and investors' -- challenges with products such as foto.sosho start with the new reality of celebrity-branded electronics. Get over it, but fame is just another form of intellectual property looking for its next connect in the crowded digital slum.

To name just a few, The Bob Marley estate now ships a full line of darn good headphones, boom boxes and apparel under the House of Marley brand. Heavy metal act Motorhead sells some decent headphones. And then there is Ludacris' Soul line, which counts no less than Tim Tebow and Usain Bolt as branded sponsors.

That would be merely stiff competition save for one fact: headphones take advantage of a rare gap in electronics: the contempt Steve Jobs must have had for audio quality. For reasons nobody has ever explained, Apple ( AAPL) devices including iPods, iPhones and iPads ship with what I find to be some of the worst-quality earphones on the market. That leaves space for new entrants, a space that simply doesn't exist in smartphone imaging peripherals.

Never mind that in-phone cameras and apps are becoming ludicrously powerful (ever heard of Instagram?). Will.i.am competes with a tidal wave of iPhoto add-ons. Take Photojojo, which sells a $30 iPhone lens from Hong Kong-based Holga that takes surprisingly interesting photos with a simple snap-on color wheel. Or, for $70, try the Huntington Beach, Calif.-based olloclip, a three-in-one iPhone lens that also takes darn good pictures.

"It is going to be hard to see what a $400 iPhone camera will do in this market," Smits told me.

I dig Will.i.am's track Scream & Shout as much as the next wanna-be DJ. But he's far from the only star peddling his name in technology. Far bigger names including Serena Williams, Leonardo DiCaprio, Bono, Justin Bieber and Kanye West (and, in a different way, Justin Timberlake with MySpace) all are flogging tech bets.

"I made this thing because I don't want to be a rapper anymore," Will.i.am joked on the Las Vegas stage. Considering what those performers make -- and the tough road he's chosen for himself in electronics, he might want to keep his options open.

A simple iPhone camera just ain't gonna go platinum here in the digital hood.
This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

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