Joint retail strategy for Phones 4u and Apple

Joint retail strategy for Phones 4u and Apple

Phones 4u has cut a direct distribution deal with Apple to stock its new iPhone 5c and 5s smartphones.

The retailer had previously received its supply from network operators but will now deal directly with the US manufacturer, meaning Phones 4u’s allocation is unlocked and available to all customers. 

Mobile understands Apple has had a similar deal with Carphone Warehouse for at least a year. Apple’s decision to cut a similar deal with Phones 4u signals the manufacturer’s desire to work ever more closely with high street retailers to rebuff Samsung’s increasing influence on the high street.

A Phones 4u insider told Mobile: ‘All our stock has been direct from Apple this time. It makes it easier to sell as the phones are unlocked. Now we don’t have to worry if we only have EE stock and no O2 or Vodafone. It means we can sell to all customers, so that’s good for business. It’s the first time we’ve dealt with them direct. Before, our stock was just from the networks, which is why it was always late.’

A network operator insider said: ‘Phones 4u’s deal with Apple offers the retailer more control over stock. It takes generic devices and pairs them with a Sim card, although the company might bypass some of the quality control measures that the operators do.’

The source added that the deal could be a double-edged sword for Phones 4u.

‘We largely drive to direct channels, but retailers still sell connections for us. If they buy direct from the manufacturer it saves us from paying them more commission and they can’t hide behind an operator. With this sort of deal it may be that Phones 4u has promised a certain amount of volume sold, so it may be a benefit and a curse for them.’ 

iPhone sales broke records after launching on 20 September. More than 9 million units sold in three days, while retailers and operators told Mobile that stock shortages were inevitable. 

The direct distribution deal lays down the gauntlet to both parties’ respective rivals as Apple tries to claw back market share from Samsung and Phones 4u vies to be the number one choice on the high street.

Strategy Analytics director Neil Mawston said: ‘It’s good news for Phones 4u as it gets closer to Apple, and perhaps it will have access to new devices in the future. It will also do the company’s image a lot of good as they’ll be directly associated with a premium device maker. 

‘From Apple’s point of view, it will get preferential treatment at point of sale and in terms of marketing. Apple needs to counter Samsung and a deal like this may help. It’s a win/win for both companies.’

Phones 4u and Apple were unavailable for comment.


Author: Matthew Campelli

Written by Mobile Today
Mobile Today


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