Cell Phone Stores Evolving into Computer Retailers? - InformationWeek

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4/13/2009
07:42 PM
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Cell Phone Stores Evolving into Computer Retailers?

More choices are always something that any businessperson desires. The options a company has when deciding where to purchase its computer equipment may soon be expanding. Cell phone stores are looking for ways to increase the number of items that they carry, and many are looking to pick up more computer systems. However in this case, the addition options also come with a few potential downsides.

More choices are always something that any businessperson desires. The options a company has when deciding where to purchase its computer equipment may soon be expanding. Cell phone stores are looking for ways to increase the number of items that they carry, and many are looking to pick up more computer systems. However in this case, the addition options also come with a few potential downsides.AT&T is one carrier that is trying to expand its product portfolio. Earlier this month, the company began running promotions where customers paid as little as $50 for new netbooks. The idea was to increase sales of the companys home and business broadband services, and the small devices were bundled into new two year service contracts. Since the initial results were encouraging, the company is thinking about expanding its services to other stores, so small and medium businesses will have one more alternative for buying computer and data networking services.

The program illustrates a handful of changes that may impact these businesses. First, cell phone stores have had trouble staying afloat. These outlets have to employ a number of tech savvy salespersons, who are more skilled than typical retail associates. The employees workload can fluctuate dramatically by time of day and by season, so maintaining proper staffing levels can be tricky. The contracts customers sign is often for a relatively low amount (a few hundred dollars) and spread out over a long time period, usually 12 to 24 months. So building a sound business case can be difficult. The change also underscores the increasing importance that netbooks are gaining. Since the power and capabilities found in these systems has increased, they are gaining more attention. Also, there is growing overlap between smartphones and netbooks, so the carriers may be trying to protect their device revenue stream.

However, the change could cause problems for small and medium businesses. Their employees work with a growing variety of devices that they need to monitor and the new set of devices, netbooks, do not have a lot of inherent management features. Also pricing plans for wireless services, which have always been difficult to control, have become broader and more difficult to gauge. In sum, the companies have more choices but also face more management challenges.

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