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| Sohail Ratansi, managing director, Fones U Like |
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| Chris Mayers, managing director, Border Mobiles |
Each month the IMPDA asks a panel of dealers how they feel about the hottest topics affecting the channel community. This month, we are looking fi rstly at last year’s increase in software faults on high end handsets. This year could see the same happening again, which is obviously not good for customer confi dence or for dealers. Much has been blamed on the clash of the manufacturers’ software with the operators’ settings and services. What do you think manufacturers and operators need to do to redress this, and bring confi dence to the consumer in the handset they get from you?
John George, managing director at JAG Communications:
JAG Communications was established by John Alfred George in 1991 in Par, Cornwall. Since then, JAG has risen to become the UK’s third-largest independent mobile phone retailer, with a chain of 80 branches spanning England and Wales. JAG provides contracts and handsets on all fi ve major UK networks: As a mobile phone community we are much more aware of the problems with software faults on well known models than the customer.
As in any sales industry there is a period of time when it is acceptable to have issues with new cutting edge products, for example when software and hardware collide. This applies especially with the mobile phone industry, being so fast paced as new technologies are being introduced to handsets.
Most early adopters of high tech products are more technically astute, so see these issues as a challenge, and I am sure that these customers will live with the issues of software faults, providing the phone manufacturers get there in the end.
In most cases the clever software is not the core requirement, so as long as the mobile phone works well they will live with it for the moment.
I would say look at the Microsoft Windows platform; the majority of people use it on their PCs and nearly every fi ve years it changes just about at the time that all the bugs are fi nally fi xed, and then we start all over again. So no, I don’t see it as a major issue at this time, although as we become more reliant on the other services that will change.
Sohail Ratansi, director, Fones U Like:
Sohail has been involved in telecoms since 1996, from a retail job to Cable & Wireless to a break in banking, then back to the mobile industry. He set up Fones U Like in 2006, starting in consumer, and moving into B2B. Now, 95% of the company’s business is B2B: The main issue is that the manufacturers were rushing to release handsets to meet public demand, and also to try and recuperate investment in the developments of the handsets.
With the internet being used as the source of scoops on new handsets and technologies, the manufacturers have a lot on their hands. I think the fi rst thing the manufacturers need to do is to cut down the menu size. Too many choices can lead to many issues that need to be ironed out.
RIM’s BlackBerry Bold was plagued with issues which have fi nally been sorted out it seems. Apple too had some issues with the iPhone. 2009 should be a year of going back to basics, try not to release too many new features, but instead going forward and improving the feature sets that have been released to the public in the last 18 months or so. 2008 was a great year for new features, with fast cameras boasting fi ve and eight megapixels being released quite regularly, becoming the norm. My advice would be to improve on current feature set and then try to work on newer technologies.
Chrisse Mayers, managing director at Border Mobiles:
Border Mobiles fi rst started in April 2004. It is based in the small town of Hawick on the border of Scotland and England. It is a small family fi rm supplying mobiles via its website and from out of its own shop: Today’s mobile phone customers have to be split into three categories: the geek who wants his phone to everything and more; the customer who is looking for some good features but ultimately reliability; and the customer who wants a basic reliable handset.
The customer who wants leading edge technology is prepared to put up with small software issues as long as manufacturers can repair these faults quite simply, maybe via handset updates. All manufacturers need to make this available as every handset user uses their equipment differently. This type of customer realises this is what happens, and are quite happy to accept it.
The handset manufacturers need to test the second type of customers’ handsets further, possibly even just re-housing tried and tested solid handsets to update them. For example, the Nokia 6230i became a solid, reliable handset by its end of manufacture. For the customer who is looking for that type of handset, why not use the same internal workings and software in a re-vamped casing? The customers would be happy with the reliability without realising the technology was slightly dated, again increasing customer confi dence.
As for those who want simplicity alongside reliability, the revamped version would work every time. I still see customers using handsets that are six or seven years old, often just needing replacement batteries or housings to freshen them up. These handsets just keep on going and their users are happy, and unlikely to want to change manufacturer in the event of theirs actually failing. However they will if their handsets parts are not reliable.
Towards the end of last year many companies were experiencing a diffi cult time, with many retailers claiming a poor sales quarter. With the emergence of ongoing revenue from a number of network operators, and more convergence taking place in the industry, is it likely that some distributors will merge or be taken over? Is the market gearing toward the larger retailer, rather than the small independent who may not be fi nancially strong enough to survive the credit crunch?
Mayers, Border Mobiles:
I see this year as a very diffi cult year for many companies and small businesses; if Woolworths can go then who is safe? Nobody in this present climate, I fear is the answer.
I don’t see distributors merging; more likely survival of the fi ttest. But I would not be surprised to see any of them go, mainly due to network pressure and the fact that the networks do want to deal directly with customers. I do think the market is gearing toward the larger retailer with the assumption that they are in a fi nancial stronger position. However the larger the company the higher the overheads have to be, which would then place the smaller independent in a like for like environment at an advantage.
As we have seen with the fall of Woolworths, larger companies are given more credit by suppliers, so I would say those whose overheads are low and who don’t have large debts stand a reasonable chance of seeing the credit crunch through, but they will all have to diversify and go the extra mile for their customers.
I see the networks tightening up on their credit checking, possibly requesting deposits from more customers or being more choosy as to who they accept, something which can only be good and maybe bring value back to the industry.
I have seen a shift in customers now not wanting to commit to long term contracts in favour of SIM-only deals. Maybe this is the time when the networks can take advantage of these types of deal and bring back the handset charge, injecting real value into commitment for the customers, and maybe even a time for the networks to talk to dealers to see what the customers need during this time, reducing the risk of loss to the network, distributor and seller.
Ratansi, WAP-D, Fones U Like:
2009 will be year where it will be survival of the fi ttest. It will be a year where working in synergy with companies that offer related products maybe the way forward.
I see a lot of dealers closing down, this year especially if they rely solely on mobile phone connections. Disties like Ingram Micro and Brightstar will start to look like the model companies, offering a mix of both IT and telecoms. This is very important especially as consumers are becoming very tech savvy, with data products used more on a daily basis than ever before.
The buzz word for the year will be convergence. Dealers offering both data and telecoms may fi nd the year not as demanding as those who do not. The current economic climate will really work its wicked magic on small business this year; with so many big retailers already closing down in the fi rst week of January, the next 50 weeks look very scary indeed.
This leads me to retentions. This is my biggest bug bear of the whole mobile phone industry. The networks offering silly deals to retain customers will hurt the dealers a lot. This approach by the networks might make it hard for us to get new customers or even upgrade old ones. If however we can retain the customers with similar packages as offered by the networks directly, then we may have a chance of survival.
The IMPDA (Independent Mobile Phone Dealers Association) is open to all UK dealers and distributors. The aim of the IMPDA is to achieve a level playing fi eld for its members, and to champion quality improvements in the industry for a better future. If you would like to join the IMPDA then simply email membership@impda.co.uk. If you have a concern or story then either email admin@ impda.co.uk or call 0844 884 9702.