Questions & Answers

Questions & Answers

What do you see as being the big trends for mobile distribution over the next six months, and why?

Richard Turner, Brightstar Europe managing director: Convergence and consolidation will continue to be the key trends for some time to come in mobile distribution. Smartphones are getting smarter and tablets are shrinking the size of the mobile PC, and the distinction between these form factors in terms of the functionality and convenience they offer – both for business and personal life – is blurring.

We are seeing smartphone producers moving into the slate market and smartphone operating systems being used on tablets; while PC vendors move into phones and Windows is being run on mobile handsets.

It is inevitable then that we’ll start to see mobile and computer product distributors competing for the same space as well. Both will see it as an opportunity to broaden their product and customer base and find new growth. As a consequence of this, the market is becoming more competitive and the downturn has accelerated the move towards more consolidation. There are already a number of distributors under serious pressure in the UK.

In this converging and competitive market, there is no room for compromise. You have to be capable of doing it all. That means being able to both deliver the support and availability that dealers need, and operate cost efficiently on relatively small gross margins, whilst continuing to support the sales and marketing ambitions of vendors. Increasingly that’s a tough equation to get right, and we’re starting to see a lot of manufacturers reviewing their distribution policy.

That’s something that will be a continual theme over the next few months and years. We see more consolidation at the vendor level too and that’s going to have an impact on distributors. Increasingly, you are going to see major vendor working with a handful of very capable distributors who can meet the needs of the broader base of dealers, retailers and resellers across more than one country. There are not many distributors who possess that kind of capability.

Richard Turner
Richard Turner, Brightstar Europe managing director
 

Julien Parven, Daisy Distribution marketing director: The next six months in distribution is likely to be not dissimilar to each of the previous few, but with everything gradually taking a step forward.

Consolidation within the channel is still occurring and is likely to continue as partners merge, join forces with non-mobile resellers, or simply exit. This has stemmed from the distributor sector aligning itself with a close core of partners into whom it invests more heavily and operates on a more strategic level. This involves establishing centre of excellence environments with shared commitments and rewards.

From a product and service perspective, there are three likely areas of distributor focus, each with significant and sustained growth opportunities.

Firstly, the network operators’ drive towards unified communications, each with their own unique spin on the common theme of converging a business’ wired and wireless environments. This has seen too much investment in recent times for it not to be a trend, and once the channel catches up with the opportunity the push-pull demand balance will become more ‘pull’.

The launch of business broadband services to complement the existing mobile voice and data and fixed line convergence completes this phase of the portfolio. Secondly, cloud services are set to challenge the channel. As the power of the unified communications shift opens up, there will be opportunities for line of business applications to be served to users regardless of location or platform.

Julien Parven, Daisy Distribution marketing
Julien Parven, Daisy Distribution marketing director
 

Software as a service (SaaS) has long been prevalent within hosted environments, serving the applications to the desktop. However, with the smartphone revolution continuing apace, serving these to a mobile platform has infinitely more user appeal and longevity.

Can the channel adapt and embrace this? Time will tell, but with more tablets coming and operating system incompatibilities, SaaS bridges many gaps.

For Daisy Distribution, the third predicted trend is the growth of the machine to machine (M2M) environment.

The use of data SIMs for the repeated transfer of low volumes of packet data, remote monitoring, telematics and transaction processing is not necessarily new. However, where previously this has been provisioned by specialist providers, channel partners are now too experiencing an increase in demand for the product. This is most likely due to the more detailed and expansive conversations they are having with customers.

Ultimately, the role of a distributor is to carry network products. While applications and solutions may be introduced from third parties, the core of the industry acknowledges that where the networks go, distribution follows. Hence in the case of unified communications and cloud services; these will also dominate the mobile network operators’ trends.

 

Jason Kemp, Data Select director of marketing: At Data Select there are a number of areas that we are focusing on.

Firstly we will continue to innovate and also secure exclusive products, examples being the LG Optimus 3D, Nokia X7 and JCB Toughphone. These competitive advantages give Data Select a real point of difference against our competitors.

Secondly, we continue to develop key account relationships with our Platinum Club having 60 members and a further 100 having key account status. What this means is that we are providing value added services to these accounts and not just selling kit.

It’s been flattering of late to see both Brightstar and 20:20 try to replicate Platinum Club, but after four years we’re confident we offer the best partner programme. The mobile market is well into maturity so it’s essential to retain existing customers by adding value.

Thirdly, high street retail is in for a shake up with the removal of prepay subsidies. Does this mean there is an opportunity for SIM free? Will the high street stop selling mobile through nonspecialists? This is a real ‘watch this space area’ as by Christmas the landscape could look a lot different from last year.

Jason Kemp
Jason Kemp, Data Select director of marketing
 

Lastly, product mix. LG, Samsung, Sony Ericsson, Nokia, Blackberry, Motorola and HTC all have really good (and successful) products at the moment. Consumer choice is massive and there are very few bad phones out there. For the first time in ages all of the manufacturers have devices that can stand toe to toe against the competition.

What this means is that manufacturers will have to put pressure on disties to ensure the focus is on their products. We’re already seeing this, but with such an extensive customer portfolio, we’re confident we can keep all our manufacturer partners happy.

 

Gail Hollinshead, Mainline Digital Communications director of dealer sales:Despite the challenging trading environment that continues, affecting both resellers and distributors alike, there is plenty on the horizon to remain upbeat about.

Smartphones continue in their popularity and we expect to see further penetration into businesses of all types as the reliance on a device to run business and personal life increases. This is prompting greater education to the customer in the use of data and the charges that come with it, so they can manage their budgets accordingly and avoid the escalating issue of bill shock.

We will also see further demand for apps; iPhone, BlackBerry and HTC are at the forefront of working with our dealer base to educate them on the key drivers behind the applications of these smartphones.

With the myriad of recent launches of tablet PCs, there will also be some uplift in the tablet market, and we anticipate a good level of demand for the BlackBerry PlayBook, especially given the strong association between the brand and its provision for business users in the mobile market.

Gail Hollinshead, Mainline Digital
Gail Hollinshead, Mainline Digital Communications director of dealer sales
 

The iPhone is set to remain a strong proposition in the marketplace and with an increase in the number of accredited partners, Mainline is well placed to service this demand through the channel.

In terms of the trends in the dealer/distributor relationship in the next six months, we will be focussing on assisting dealers with targeting quality business and working closely with them to provide a sophisticated level of IMEI. We also believe there will be a focus on providing out of bundle spend reporting, which will help dealers make business decisions by profiling their quality customers to attract more of them.

We will continue to consolidate our position as a distributor in the B2B telecoms industry in the next six months by providing support to dealers for the trends identified as well as maintaining our compelling service and product range to dealers. Our existing dealers will continue to enjoy the exciting and motivating incentives we offer and our commitment to help grow their business whether it is through the support of our marketing programme Blueprint, or from our dedicated sales teams. All in all, I think we can be optimistic about the future marketplace.

 
 
 
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