Electronics retailer making move in handset sales

When you’re looking to get your hands on a new phone, the most logical place to visit is an authorized dealer, right? After all, they normally have a huge selection, a specialized staff, and the ability to cut you a deal. Plus, since phones are locked into a certain provider nowadays, it sometimes seems like the only option.

Best Buy would like to change your way of thinking. They’ve partnered with Carphone Warehouse, the largest distributor of mobile phones in the UK, in order to bring a greater mobile experience to their stores in the US. The project began in Manhattan, and with its success the company is ready to expand.

From the first quarter 2006 to the first quarter 2007, carrier stores actually saw an increase in market share, going from 60 percent to 63 percent. It would seem, then, that Best Buy has little incentive to enter this market place that’s turning towards the carriers.

But that doesn’t tell the whole story. Best Buy saw a 43 percent increase in phone sales over the past year, while rival Circuit City saw a 40 percent increase. So greater share of the market or not, Best Buy is seeing reason to amp up their phone division.

The Manhattan experiment, which displayed 10 standalone stores and three “stores within a store,” is expanding to areas such as Boston, Philadelphia, Washington, D.C., Baltimore, Raleigh, Chicago, and Minneapolis. Best Buy and Carphone Warehouse plan to open 190 in total, with 170 of being additions to existing Best Buy stores. The remaining 20 will be standalone stores under the moniker Best Buy Mobile, utilizing the company’s strong brand in the US.

So why is Carphone Warehouse, a British company, heading to the US?

Ovum analyst Mike Cansfield, who follows Carphone Warehouse in the U.K., says the company believes wireless penetration is low enough in the United States to give it an opportunity to break into the market. With 233 million subscribers, the United States has about 75% penetration, which is well below most European countries.

Sounds like a plan. Look for a Best Buy Mobile store opening up near you. And let us know what you think of it.

[Wireless Week]

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