Smartphone Is A Click Away Print

Wireless carriers are continually promoting their latest offering via their online stores. Purchases of cell phones and related items online are a growing trend in Europe. According to new findings in the TNS ComTech research project, "...almost one quarter of new mobile phone purchases in Western Europe's six largest markets were made online." Back in the United States you can find various online retailers including; Amazon Wireless, Wirefly, Let's Talk, Simplexity & TMI Wireless. There are tradeoffs when purchasing phones online, and although this retailing option has had a rocky showing in the US; the overall consensus is that this type of retailing channel is poised to become a legitimate option for US consumers.

But First, A Little History...

Simplexity is an emerging theory relating the idea of a complementary relationship between complexity and simplicity; it is also the name of the leading online provider of wireless services and devices. Prior to that company's emergence in 2008, InPhonic was the company that some would say introduced the online wireless marketing model to the forefront. In its day, Inphonic's board of directors included former VP candidate Jack Kemp and John Sculley, the marketing genius behind Pepsi Co and Apple. Founded in 1999, the business model for the company was Expedia; they gathered information on companies and compiled that data into a single site making it easier to search for the best phone deals. Towards the end, InPhonic continued to operate their main online webstore, Wirefly.com while financial problems and pressures began to mount. Wirefly would garner industry- wide accolades and awards, but by 2006 all of that went away and by the end of 2007 InPhonic had been swept away in Chapter 11 proceedings.

New Company, New Plans

In 2008, Simplexity emerged as the new company bringing cell phones and wireless services to the online world. The new company has focused its efforts in simplifying the online transaction for their customers. The trick was to get the customer comfortable with purchasing a cell phone and wireless plan online. Simplexity CEO Andy Zeinfeld states, "We get a Social Security number in order to approve credit and I guess that adds a whole new dimension of fear for some people when they're buying online because of the potential for identity theft." Price has and will continue to be the driving factor for purchasing a wireless device online. Most phones offered on sites like Wirefly (Simplexity) or Let's Talk, are sold for free, or deeply discounted. Free shipping is also offered with the purchase of a new two year contract with one of the major carriers.

Future Growth, Future Potential

With only approximately 14 percent of wireless phones being purchased online, it is still too early to say if there will be a monumental shift towards online purchases, but the market is giving small positive clues that might suggest future growth. Marcelo Claure CEO of Brightstar Corp. stated in his article on May 4th 2010; "By the end of 2010, 1.2 billion people will carry handsets capable of mobile commerce. Customers will expect their favorite retailers to deliver across mobile, Web and in-store." In 2010 Google released the Nexus One exclusively online; albeit to mediocre results, but it did lend an air of credibility to the retail channel. Amazon has also demonstrated some success in online device sales, primarily through the selling of the Kindle but it was successful in reinforcing the online device purchasing experience to its customers.

Between Complexity and Simplicity...

The ability for retailers to bring a uniform experience between their physical storefront and their online ones', appear to be the balancing act that is common today. David Owens, vice president of consumer marketing for Sprint Nextel, says "Your channel strategy must have a blend, leveraging the Web for research, education and buying." With the myriad of apps out there, uses for the mobile device have introduced a new mind-set that has carriers wanting to become a destination for consumers. Online retailers like Simplexity have an added advantage of zero overhead costs associated with operating a brick and mortar store, but lose the opportunity to create a face to face connection with a potential customer. These online-only retailers leverage their experience towards those who are already knowledgeable about the smartphone or device they need.

Conclusion

Worldwide mobile phone sales grew 35 percent in 3Q of 2010. Gartner, an IT, research and advisory company also stated in their Nov. 2010 report that during the same period, smartphones sales increased 96 percent. The growth in the industry offers a mixed blessing of steady growth and growing pains. Purchasing a new cell phone, accessories and related plans all online could become the de facto standard in the years to come. Taking a page from Netflix, companies like Simplexity could be sitting firmly in the driver's seat if brick and mortar stores ever go the way of the Betamax.

 
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