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    With the demise of Phones4U, what now for the high street?


    PaulOBrien

    I suppose you have to look at it through the eyes of the networks. They have spent millions of pounds establishing their own high street presence and yet they are competing with stores that are reselling their own products and taking an extremely health commission in the process. They are competing with themselves.

    Without doubt this is what has led to the demise of Phones4U, which officially entered administration today. The networks want to get as close to their customer as possible, to retain as much profit as they can and the mega-chains which have previously sold multiple brands just don't fit into the picture.

    Will the consumer lose out because of today's events? Probably. If you wanted to go into a shop and get the best contract from a number of operators, previously you had to do that at either Phones4U or Carphone Warehouse. Now, only CPW gives you that option and it's hard to predict a rosy future for them too - they will need to negotiate with the networks and offer a better deal than P4U were able to. At least after their Currys / Dixons merger they potentially have a wider portfolio within the business to sustain its existence.

    In reality, 'comparison buying' in stores has been off the table in the true sense for a little while now as the networks have gradually pulled out. Three for example have only sold in their own stores / online for a while and have conducted a concerted customer acquisition cost reduction initiative, stretching even as far as removing themselves from cashback sites. A comparison isn't a true comparison if not everybody is included.

    I feel most sad for the employees of Phones4U of course and also the impact it will have in towns. Where I live we have no operator branded stores, but we do have a Phones4U (did?) and have a Carphone Warehouse. Perhaps we will see a growth in operator stores to pick up the slack, but I consider it unlikely, as they will want to reduce their retail costs and grow their customer base online where they can.

    One slightly interesting rumour doing the rounds today is that Tesco is considering their own 'Phone Shop' network outside of their stores, with a number of ideal retail units suddenly becoming available, I wonder if we'll see this sooner rather than later?

    I'm not sure I really blame the networks for what they've done - I know EE have taken a lot of flak today - from a purely business perspective maybe this day was inevitable.

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    For want of somewhere better, I started this thread: http://www.modaco.com/topic/373409-phones4u-collapse/ in general discussion last night.

     

    I feel sorry for the employees who will now be losing their job, although Dixons-Carphonewarehouse, or whatever it's called, has said it will be looking at the possibility of re-employing phones4u staff where possible.

     

    I think phones4u has been rather short-sighted giving the pull away by the networks from third party suppliers and should have been looking for a way to re-positioning itself in the market place.  On a personal note, I find the whole mobile phone business entirely unsatisfactory.  The range of models is limited to the 'official models' of the BIG manufacturers, with ZTE and Huawei bringing up the rear as late entries in the UK market.  You cannot buy a dual sim phone on the high street, which is a glaring omission given that a sizeable portion of the workforce has a 'company phone' and is therefore saddled with having to carry about two handsets, nor are the operaters interested in any of the Chinese phones that have a lot of fora members raving.

     

    phones4u is a profitable business and it could take a leap with, say, a few stores in key cities, selling an entirely different order of phones.  Not everyone wants a contract and pay and go customers may welcome a broader range of higher spec models at reasonable prices.

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    Yes it is, but you cannot buy it on the 'high street'.  In any event, I think last year's Sony Xperia M2 dual is a better phone.  I had a look at the HTC One dual, but this is very expensive and there have been a number of concerns from Amazon buyers.

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    One of the things that I have really disliked in recent years is the network / handset exclusivity deals. If you are after a particular handset affected by this, then not only does it mean changing provider, but also that they don't need to try to be too competitive on the contract offered with said handset.

     

    This, I believe, is where these 3rd party sellers come in (the likes of P4U & CPW). At my wife's last renewal she knew exactly which phone she wanted, but also wanted to stay with her current provider who didn't stock the phone. Enter P4U where she was able to upgrade on that handset because they provided the SIM free retail version (another bonus), and on top of that she got given a freebie and a monthly discount.

     

    Whilst in the past I had always bought direct from network, it is looking ever more so that limiting to this channel will mean worse deals for the consumer.

     

    When my wife's contract ends in January she will be following my lead into the pay monthly option (currently GiffGaff), therefore saving a considerable amount of money. She has already sold her current contracted phone and bought a OnePlus One (as have I), and we will both be more likely to stick with buying more affordable phones outright in the future. Therefore bypassing the traditional retailers completely.

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    I imagine, like the original G, it will be available on the high street very soon.

    P

    Well, I will keep an eye out just out of curiosity but everytime I have asked in any of the network shops, Carphonewarehouse or phones4u for a dual sim model, the response is we don't sell them.

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    *within it's concessions only...

    P

    Sadly, just "800 people who work in Phones 4U concessions at its Currys and PC World stores" out of a total of 5,596 jobs.

     

    And after they combined to kill them off :- 

    Separately, mobile phone network operators Vodafone and EE are in discussions to buy parts of stricken retailer Phones 4U, sources say.

    Potentially, just their database?

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