Business Update from John Birchall
The crowded market of sophisticated mobile phones may have recorded its first major casualty. The much trumpeted ‘palm’ phone has not exactly flown off the shelves of retailers.
The company thought it would sell at least 600,000 phones in the last quarter of 2009 and imported 1,000,000 into the UK. Sales now seem to be stuck on 400,000, which means lots of stock in warehouses and the storerooms of shops.
Apple’s I-phone and the fast rising Blackberry have taken a large market share and now with Smart’s shares falling retailers are worried that they may get left with a product few want and with little chance of a fast reacting supply response for spares and bolt ons.
To make matters worse Google have now introduced their Nexus One.
So, with possible cash flow problems and up against some really big competitors it looks likely that a giant in that market will swallow one of the phone providers up. Excuse the pun but the ‘smart’ money is on either Microsoft, who might see a way into a market they currently don’t visibly operate in, or Dell, who have made a noticeable success in the buy direct PC model buying a smaller producer.
Whatever does happen it’s a good
Business Studies case study – a market that sells what supposedly we all want but with an increase in the number of competitors fighting each other it’s not surprising to discover that someone is going to ‘die’. Who will it be – alas, Smart look to be the likely casualty.
Might be worth asking students why – if they can guess when then they are A grade material!
John