Perfect signal

Channel Middle East called up some of the region's key players to ask what path resellers and retailers need to take for maximum margin.

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By  Dawinderpal Sahota Published  November 9, 2007

The route-to-market model for mobile handsets may seem fairly rudimentary but it masks what remains one of the most vibrant hardware categories in the IT channel. With both technology and channel convergence shaping the direction of this burgeoning market, Channel Middle East called up some of the region's key players to ask what path resellers and retailers need to take for maximum margin.

They are: Harout Bedrossian (HB), regional product marketing manager for Motorola mobile devices; Vishnu Vardhan (VV), executive director at HTC Middle East and North Africa; Vinod Nair (VN), regional manager of mobile phones at Samsung Middle East and Africa; Marko Luhtala (ML), director of retail and channel management Middle East and Africa at Nokia (main picture); and Jack Craine (JC), general manager Middle East, Africa and India at i-mate.

How has the handset channel evolved over the past 12 months and what are the trends you are seeing?

ML: We see a few trends, firstly that distribution is becoming more local and secondly that distribution is becoming more professional. The world has moved away from the trading mentality towards more established local distribution. The distributors are building their infrastructures and capabilities in the key markets to get mobile phones to each and every shop - even in the rural areas. Nokia is also setting up offices locally. We have 30 offices in the Middle East and Africa and this has a clear impact internally. Before, we used to talk about how business is in Saudi Arabia and now we talk about the market and consumers in Riyadh versus Jeddah versus Dammam.

HB: We see the emergence of non-traditional channels and by traditional I mean the usual electronic stores and mobile specialist retailers or traditional mobile phone distributors. We have seen the emergence of non-traditional channels ranging from hypermarkets - which are becoming a primary destination for consumers wanting to buy a mobile phone - all the way into specialist companies such as IT companies which are also selling mobility solutions to extend the office into being mobile as well as IT solutions.

JC: The line between feature phones and converged devices is becoming increasingly blurred. Within that there is a massive increase in competition and lots more products to choose from. From a segment standpoint we're seeing more products competitively priced. i-mate's objective within the handset channel is to make sure we clearly differentiate ourselves, not only with the products and their design, but also the services, software and support that we offer.

VV: Most of the GCC countries are dominated by the retail channel especially for GSM handsets. This is primarily due to the purchasing power and consumer demand for product functionalities. Today's consumer is looking for a phone plus capabilities such as data, value added applications and above all integrated functionalities in the handsets. The retail channel has played a vital role in showcasing smartphones in line with customer expectations and is able to provide choices to the customer by displaying a range of products in their showrooms. This provides scope for the customer to play with the product before making the purchasing decision.

How is the role of the handset channel evolving in the Middle East?

JC: The channel plays a huge part because as the market evolves, the ability to effectively communicate and educate the consumer about what that technology can actually do for people is a big challenge. What that means is that when a consumer walks into a store, they must receive clear communication about what Windows Mobile is as a product. The key people to do that are those in the retail stores and for them to communicate that we need to make sure we've got the necessary training and education programmes in place to get people comfortable with what they're selling.

ML: The overall importance of the channel is increasing because the route from Nokia to the consumer has to be well-managed. In practice, this means our portfolio is growing and we are catering for many other needs, and it means that retailers are evolving from ‘me too' stores towards stores that offer a value added experience for consumers wanting the high-end series, or towards a cost advantage in reaching a large number of consumers. ‘Average' stores will have a difficult time going forward, retailers need to choose which customers they serve and become a best-in-class retailer when it comes to delivering that service to customers.

VV: The partners are beginning to analyse and profile the customers who visit their showrooms, and accordingly decide on planning the profile of stocks. Also, the Middle East retail channel is playing a vital role in terms of providing good product visibility and in-store branding.

HB: The role of the channel is evolving from just being a logistics provider and providing credit and boxes into opening up new market segments and finding the right way to cater to the diverse requirements of consumers. This means approaching IT companies to extend their solutions and opening up the non-traditional channels like petrol stations, where these days you can find mobile phone accessories. Also, consumers are becoming more informed and more picky about what they like and dislike. For the channel, it is no longer enough to fight on the basis of display space. It is all about how to make the buying experience more enjoyable.

4220 days ago
Halina

Many thanks for such a great source of useful information. It's a great website.

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