First they used to be inspired by Apple and iPod. Now they are taking a cue from Apple’s retailing strategy.
Cell phone makers are getting hungry for real estate these days. Motorola launched its first store in Shanghai a few days ago, with plans to open several more in China. Nokia opened its first U.S. store last month, Samsung has its New York showcase, and Earthlink is touting Helio phones in downtown San Francisco.
It looks like a growing trend for mobile manufacturers–traditionally the brand behind the well-branded carriers–to open outlets to market new designs and give tutorials on increasingly complex phones.
It worked for Apple. Build a hip store, add tech-savvy sales people, and stuff a room full of add-ons that customers might buy up while waiting in line. Apple brought in $636 million in net sales for its retail divisions in the most recent quarter, with $29 million in operating income. But the global cell phone companies are a far cry from design-conscious Apple, which may or may not add phones to its line-up one day.
Motorola might have hit it big with the design and branding of the Razr, which sold more than 23 million by the end of last year, but Nokia and Samsung have never been big design leaders. It’s hard to imagine Nokia’s Chicago store getting the attention paid by rabid Mac and iPod fans at Apple’s digs. If Motorola’s Shanghai launch is any indicator–phone tattoos?–we’re not so sure of the prospects.
The trend is also as much a signal of the difficulties of the phone market as anything else. The increase in the world’s phone sales is coming from growing markets with low-margin mobiles, while the markets with significant phone penetration are seeing manufacturers try to push high-end designs to plea for replacements. The stores are a way to tout the most sophisticated and stylish. and that’s likely another reason why phone makers need outlets–the devices are getting so complicated, a lot of customers need basic lessons to start!
One possible upshot of the store trend is that if Nokia can develop a design-driven following, a powerful brand could help the company if it ever decides to go head to head with the carriers. A WiFi phone that looks like the Razr could convince consumers to buy. Our advice to a Nokia is to keep creating those partnerships with Google and maybe the duo can deliver the design power, a compelling store, and an industry-wide shift in who controls the ecosystem.
9 comments so far
3:35 AM PT
Everbody loves Nokia in this part of the world. Maybe its true half of the Nokia phones sold here are low end models. However, its an undisputed leader with more than 50% market share in India.
4:22 AM PT
Nokia did, for years, have its own Nokiastores, at least one here in Amsterdam, but closed it down. I heared it was the easiest way to get a firmware update without losing your phone for weeks. Bricks and mortar stores have some advantages, especially if your unhappy with something :)
6:19 AM PT
The Nokia store in Chicago is a joke. They seem to only care about catering towards the fashionistas and ignore people who want products like the 770 tablet. The staff seemed more concerned about the quality of the techno music being pumped in versus knowing the products.
9:14 AM PT
We have some amazing mobile-phone boutique shops in London - often in prime real-estate. Many are on multiple levels, demoing maybe no more than 20 phones on display in the entire shop.
But I also feel very cynical of them - the costs must be outragous and I can’t help but think it’s what is pushing the costs of most regular mobile plans here in the UK aboue the £30/$60pm mark.
I can’t help but think that fulfilling orders and sign-ups online is a win/win for both the consumer and the carrier.
If phones really are so complicated that they need to be demonstrated, maybe there is a design issue.
If people want to be buy into a “lifestyle choice” then maybe as consumers we need to rethink how we value technology and whether we’re becoming slaves to what is essentially a tool.
9:23 AM PT
Nokia just announced the launch of a flagship store in Hong Kong:
http://www.mobiledia.com/news/48837.html
… right after Motorola said it launched a store in Shanghai:
http://www.mobiledia.com/news/48663.html
This is getting ridiculous.
3:29 PM PT
There are several Nokia stores in Bangkok. They’ve been there for years. I also saw a few in KL. But then, these are two countries where operators don’t really sell handsets.
I’ve seen some Orange branded handsets and I think Hutch (ie. Wampoa) had a few as well but most consumers simply go to the mall and buy a handset. Then they shop around for a plan or pre-pay minutes.
And here as well, the most coverted handsets seem to be Nokia (or Sony Ericsson–which operates retail outlets through the 4-5 branches of the Sony Store in Bangkok.)
8:51 AM PT
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4:45 AM PT
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10:30 AM PT
[...] and Nokia are sensing the shift and have been opening up retail outlets in integral markets looking to win over brand loyalty with a hands-on experience. Motorola went to Shanghai, Nokia in [...]
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