September has started with a bang in the mobile industry with Vodafone ditching Phones 4u and agreeing a long term deal with Dixons-Carphone and sources claiming Rob Orr has departed from Samsung, here’s Mobile’s analysis of what it all means.
Phones 4u – what do you do?
Everyone in the mobile industry had been anticipating EE’s review of its retail relationships so it was a surprise when Vodafone announced that it was cutting its ties with Phones 4u and extending its partnership with Dixons-Carphone for the ‘long term’. Having lost Three and O2 already Phones 4u looks in a somewhat perilous position that has the potential to become far worse if EE follow suit. It would leave the retailer only carrying MVNOs on its network roster, which would be very worrying going forward. The question is now how does Phones 4u define itself? And what market does it look to chase? Will they begin to carry a large number of MVNOs on their books and chase the lower end of the market? It would be a dangerous game to play. On the other hand, if EE sticks with Phones 4u the retailer will be forced out of necessity to push their services the hardest. This would surely de-value their ‘independent’ status, which would be even more problematic.
Vodafone’s decision to turn away from Phones 4u is yet more evidence of the industry-wide shift by networks to establish a direct relationship with the consumer at the expense of the independent retailer. The trend will be a worry for Dixons-Carphone too because despite their market dominant position they know that they need to make sure they continue to justify the value they bring to the networks. Quite how this plays out is going to be a fascinating watch.
Samsung role – a poison chalice?
Rob Orr’s departure from Samsung will come as a blow to the mobile manufacturer which must have been hoping for a period of calm after Simon Stanford’s unexpected departure in June.
Orr had been seen as a safe pair of hands to take the company forward following Stanford’s exit and had even been tipped as the leading contender to take his place this summer.
Sources say he left because he ‘did not see eye to eye’ with the Korean management, which leaves industry observers wondering just what their differences were. Samsung has long been criticised for its aggressive style, with its sales team said to have been given impossible sales targets. Was Orr arguing for a change of strategy? Whatever the strategy and whoever Samsung persuade to take on this role, which many deem a poison chalice, Samsung has to get the wagon back on track and fast, if it is to tackle falling smartphone and tablet sales.