12/10/2008 11:59:00 AM
Cheap phones take the lead in the Christmas run-up
The annual bonanza of low-end handsets has hit the high street, with ultra-cheap phones arriving in stores last week.
Retailers have reported that phones costing less than £30 are taking a bigger share of sales than in the past, with cheap phones, such as the Nokia 2610 and the Samsung E250, selling in high volumes. The Samsung J700 is also a big hit with customers at the moment, according to retailers, with the device heavily subsidised.
According to research firm GfK, 379,000 prepay units were sold in the week beginning 24 November, which was up 40,000 sales on the previous week. Only 259,000 prepay units were sold three weeks earlier.
Industry experts have tipped that operators will plough money into cheap prepay deals in the final few weeks of this year. Sales in the final week before Christmas 2007 broke past the one million mark after huge operator subsidies.
It appears that momentum in the prepay market has failed to start as early as in previous years.
GfK analyst David Evans told Mobile that the Christmas-fuelled prepay upturn began around 20 October 2008, which started as much as five weeks earlier in 2007.
Evans added: ‘People are much more price conscious this year and we’re seeing an increase in people hunting around between retailers for cheaper prices. A £5 difference on the price tag is making more of a difference than ever.’
He pointed to an increasing number of customers looking for low-cost options.
Woolworths, which has traditionally been one of the top prepay retailers over the Christmas period, has cut its prepay prices by 10% after going into administration last week. It is still being undercut by Argos on many of its handsets’ price tags.
Box breakers monitor price arbitrage
The difference between prepay prices and international trading prices is widening in an increasing number of cases, alerting box breakers looking to buy the handsets in large volumes.
However, retailers have maintained that they have strict measures to thwart box breakers, limiting purchases to just one and only allowing cash purchases in some cases.
Trading price vs shelf price
Shelf price £44.97
(Tesco, Tesco Mobile)
Shelf price £29.31
(Phones 4u, O2)
Shelf price £68.50