Dixons-Carphone merger: What it means

Dixons-Carphone merger: What it means

With the Dixons-Carphone merger now complete Mobile spoke exclusively to industry insiders on what it means for the mobile industry:

 

Andrew Harrison, former CEO Carphone Warehouse, and now deputy group CEO of Dixons Carphone:

“Sometimes people put two businesses together from a defensive perspective. But this merger is all about looking forward, where the market is going and aiming to evolve with it. We are constantly speaking to the networks, the service providers, the manufacturers and other industry players looking at new areas where they can grow their businesses. This is particular important as some of the traditional areas for growth are beginning to fade off and they need to find new opportunities. In this market you need to meet the future head on.

“This all began with a conversation between Carphone Warehouse and Dixons about running a Currys/PC World mobile store. That just goes to show how important our white label services are and will continue to be, it is a major growth area for us. Of course, bringing the two businesses together is a big job and we’ll have to remove certain areas of duplication but we can and will make things better. It’s about service, we’re not a faceless internet provider, sure they might be cheaper but you don’t have that real world access to services.”

 

David Kassler, CEO, Phones 4 U:

"The roll-out of Carphone bays in Dixons stores is a natural next step from the news of the merger and fully in line with our agreement - this will not impact any Dixons stores where Phones 4u currently has a presence until the end of our contract. Our priority continues to be investing in the evolution of the Phones 4u business and we have been delighted by the interest and approaches we have received from other potential retail and online partners, which we are in the process of exploring. We will continue to help our customers embrace an ever-more connected world through our high street stores, our new mobile and web commerce sites, and the launch of our BE.SMART proof of concept trials."

 

Sebastian James, former CEO Dixons Retail, and now group CEO of Dixons Carphone:

"Today is a historic day for us as Dixons Carphone begins trading and we set sail on an exciting new journey towards what I hope will be the first and best connected world shopping experience. We are passionate about delivering a seamless experience for our customers and focused on helping them navigate the merging mobile and technology markets, to find integrated products and services that can really enhance their lives."

 

Ronan Dunne, CEO Telefonica UK (02):

“We have a long and established relationship with Carphone Warehouse, they are our largest independent retailer. We believe that the merger with Dixons is positive, it gives a broader footprint in the larger stores and in more areas. It also offers a broader product portfolio bringing an access point to the customers looking to get a range of new devices from phones to tablets.”

 

Andy Coughlin, Head of Mobile, LG:

“LG Mobile are delighted to see the marriage of two great, trusted brands on the UK high street. The Dixons CPW merger represents an opportunity for consumers to enjoy expert assistance in one place for all their Consumer Electronic and Mobile needs.

“Furthermore, the Mobile Industry has been making noises about the connected home proposition for many years now but with few organisations explaining how simple and intuitive it really is to link their home electronics and make the most of the many capabilities their devices offer. I had the pleasure of working for Sir Charles some years ago and he once said, and I hope he forgives me for paraphrasing, that mass adoption of new tech was only inhibited by the apparent complexity of the user experience. Dixons CPW in my view are best placed to tell the story and bring the connected home experience to life in store. Coupled with the scale of the new business, they will quickly accelerate the understanding of how Mobile can act as the hub to unlock some great user experiences and ensure consumers get the best value from the purchases they have made. We at LG Mobile wish them every success with the new venture. “

 

Kester Mann, Senior Analyst Operators, CCS Insight:

“The long-term motivation for the deal is the burgeoning opportunity from the Internet of things. This plays to the strengths of both companies as the smartphones and tablets sold by Carphone Warehouse could also act as "remote controls" for the electronic appliances offered by Dixons. If successful it could become a template for the future of consumer electronics retailing.

“One of the biggest losers from the deal could be Phones 4u. The retailer is already on the back foot following O2's decision to drop it as a retail partner in January 2014. As 3 had also already severed ties, the company has been left largely dependent on Vodafone, EE and Virgin Mobile. Over time, Dixons Carphone could face the same challenges that EE encountered with its Orange and T-Mobile brand names. In our view, the cost savings offered by a single, unified brand make it almost inevitable that at some stage this issue will need to be resolved.

“Dixons and Carphone Warehouse insist that the deal will not result in significant store closures. This is because Carphone Warehouse shops are typically located in town centres and Dixons outlets are mainly in large retail parks.”

 

Neil Mawston, Executive Director, Wireless Device Strategies (WDS), Strategy Analytics:

“The merger of Carphone Warehouse and Dixons illustrates how the mobile and consumer electronics worlds are converging. Consumers are increasingly buying multiple gadgets and many want to buy them from multi-product stores. For example, dad can buy a smartphone for work, mum can purchase a tablet for home surfing, while the kids can get new TVs for their bedrooms -- all under one roof of a Carphone-Dixons store. Carphone Warehouse and Dixons are part of a broader global strategic trend of "distribution convergence". Apple has been leading in this area for many years, because it sells iPhones, iPads and iPods all under one roof in its iStores.”

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