Research Notes

UK retailers are not proving themselves worthy as strategic partners in the project to ensure the success of 3G services

The Smart Handheld Device is the next and natural step in an ongoing evolutionary process.
Like all evolutionary processes, it is one towards greater complexity. It is a process, which offers new possibilities for users, and compound existing problems for mobile operators.

The Smart Handheld Device is a cross between a mobile phone, a computer and the Personal Digital Assistant. It is our mobile phone and SMS terminal. It gives us access to email and the mobile Internet – to news and information. And soon it could replace our credit and debit cards. It could become a mobile device, with which we pay electronically for goods and services.

Many can benefit from these new devices. Users can benefit form having three devices integrated into one, and from a host of new services. Operators can benefit from an increase in revenue from new mobile services. Content providers and providers of value added services can benefit from this new media.

However, there is a problem, and the problem is retailers.

Obviously, the SHD is much more than the terminal. Introducing new users and potential SHD customers to the benefits of these new technologies, means introducing them to more than the terminal. It means introducing them to existing and future potential services.

However, in our most recent study of the UK mobile market, we found that terminals are exactly what most shops and sales persons focus on. The terminal is king, and the embedded services provided by operators, are largely ignored.

The reasons are multiple. Clearly, many sales people do not know enough about SHD and the services they offer. But most importantly the survey clearly documents a short-term focus on behalf of the shops on selling as many terminals as possible. Often shops and sales assistants lead customers away from the more complex products and toward simpler ones such as prepaid.

The survey and its findings raise serious question about UK retailers and their UMTS and 3G readiness. Will they be ready and able to provide the service and expertise necessary to sell these new and advanced products?

UK retailers of mobile phones and services are in many respects not proving themselves worthy as strategic partners in the project to ensure the success of 3G services. For this reason UK mobile operators will be forced to evaluate their future distribution strategy. They will be forced to look at existing and alternative distribution channel and their respective ability and willingness to handle complex products.

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