Carphone Warehouse plans some big buys

10 Jul 2008

In recent months, US electronics retailer Best Buy paid $2.5bn for a 50pc stake in Carphone Warehouse. This may result in Ireland’s first 4,000sq m Best Buy store this year, says Stephen Mackarel (pictured), chief executive of Carphone Warehouse Ireland

What impact has the Best Buy merger had on Carphone Warehouse so far?

Best Buy is the largest electronics retailer in the world and is Sony’s largest customer, for example. As a result, this merger has given Carphone Warehouse some serious purchasing power and access to different technologies, suppliers and products.

We’ve been leveraging that relationship and as a result we are first to market in Ireland with the Asus EeePC, a tiny laptop which comes with a 7-inch and 9-inch screen and is ideal for internet browsing and getting your email.

Is it fair to say Carphone Warehouse is no longer about mobile phones but computers as well?

Well, definitely about mobile and broadband. We are pushing into a broader communications market and more and more people are looking at not just mobile phones but broadband too. It’s the whole lot together. Already we are serving 11 broadband providers from our stores.

When we started off in the mobile space, it was a confusing marketplace and people didn’t understand the handsets, the tariffs or the terminology. Our proposition was simple: impartial advice on guaranteeing people would find the best deal that suited them.

But broadband is a very different marketplace. Will this work for Carphone Warehouse?

We are applying the same template to the broadband market. People walk into our stores asking ‘What does 4Mbps mean?’. Our job is to ensure they walk away with something that works and makes a difference in their lives.

For example, if you live too far away from your nearest telecoms exchange, you won’t be able to buy certain products. A mobile broadband product might work best.

Do you see parallels then between how mobile took off and how broadband may take off?

Over 10 years ago, most people had just one phone in the house and there were massive rows over whose turn it was or who was spending too long on the phone. If you said to someone then that 10 years hence every person would have a phone, you would have been presumed insane. Mobile penetration is 118pc in Ireland today.

The same thing is happening with laptops. Today, there’s a PC in nearly every home. But the younger generation want their own PC. They view a laptop as just as personal as a mobile. Very soon everyone in the Irish household will have their own PC.

Will Best Buy be bringing its electronics stores to Ireland?

We aim to bring some of the Best Buy stores to Ireland and beat companies like PC World in terms of service and pricing.

Three years ago I would be buying 50sq m of store space. When we bring the Best Buy chain into the Irish marketplace, I will then be negotiating stores of 4,000sq m, which will sell everything from PCs to plasma TVs. In the US, Best Buy has 22pc of the market and we aim to enjoy the same success here.

Will the Carphone Warehouse brand remain in place or will it become Best Buy?

It’s too early to say. We’re undecided at this point. The best way to describe it is as a work in progress and I can confirm the Carphone Warehouse brand will remain in place for the near future.

By John Kennedy

Pictured: Stephen Mackarel, chief executive of Carphone Warehouse Ireland

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years