A new frontier

Everyone wants a slice of the PC market these days. If it’s not supermarkets selling laptops it’s mobile phone dealers giving them away. If the thought of taking the fight to them has ever crossed your mind, then perhaps it’s the time to act on it. We wouldn’t advise setting up a fruit and veg aisle to get back at the local Tesco just yet, but moving into the mobile phone sector isn’t as far fetched as it might seem.

In an increasingly difficult market – where the effects of a full-blown recession are compounding the long standing problem of large chain, e-tail, and supermarket encroachment, diversification into mobile phones could provide small PC retailers with a new regular source of income. While it may seem a big jump, these days smart phones functionally resemble mini PCs in many respects, while the way netbooks are being sold – for free or at a reduced price alongside a broadband contract – is much more akin to Nokia’s business model than Dell’s.

Mark Simm, business manager for Indirect Channels at network operator Orange thinks it’s possible, and could offer some lucrative benefits for PC retailers: "The transition for PC retailers moving into the mobile space is both a challenge and an opportunity. With the growth of mobile broadband and embedded SIMs sold with laptops, the PC retailer is gaining experience of working with the mobile networks. It’s a natural progression for the PC retailer to move into mobility and mobile phones from working on the mobile broadband propositions. If a PC retailer has the will and desire to move into the mobile phone market then the opportunity to sell a full mobile package to a customer is a very achievable objective."

On a technological level, there are more similarities than differences between a state-of-the-art smart phone and a netbook. Without a great deal of research required, understanding the functions well enough to confidently sell them to a customer should pose less of a learning curve than some of the other product categories that have been diversified into over recent years, such as GPS devices. The telecoms industry has been pushing this cross pollination for some time, and with such investment behind it we’re likely to see more melding in the future.

"The dividing lines between the IT and telecoms industries are blurring increasingly as devices and mobile networks are pushing for convergence solutions," continues Simm. "The IT market is in a strong position to take advantage of the benefits of working with mobile operators, which allows them to offer a full end-to-end solution to their customers with all the additional revenues that can be made from this. Likewise the traditional telecom dealers can now extend their mobile portfolio and IT products to also lock in their customers. We will likely see these industries become increasingly linked as companies see IT and Mobile Voice and Data form one requirement."

For those PC dealers that would consider diversifying into mobile phones, probably the most alien aspect wouldn’t be the phones themselves, but the practices endemic to consumer contract selling. This, coupled with the fact that the mobile retail sector is well established, could be enough to put many IT dealers off the market. The other way to look at it is that similar diversification has kept many companies alive, and the fact there are so many businesses looking to sell phones means there’s certainly money to be made from stocking them.

For those who would consider taking the plunge, Simms suggests: "The advice we would give to a PC retailer is to be prepared to work with contracts and all the potential issues of commission clawback, fraud, bad debt and so on. A PC retailer will be comfortable with a straightforward contractual process, such as purchase order, supply and then invoice. The mobility solution has a number of other factors to consider when a customer buys the solution and a PC retailer should be aware of this.

"They should also look at other competitors in the market to get a feel of the offers out in the market. The mobile industry is a crowded market place already and any new partners will need to be competitive and also if possible, add value as a differentiator."