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.