Best Buy says it plans to eventually have 1,000 mobile stores across the US, up from the 77 it currently operates. The retailer is reportedly opening the stores in enclosed malls.
The move follows rumors that Best Buy could acquire Radio Shack and its 7,000 stores, one of the country’s largest mobile-phone sellers.
Right now Best Buy says it controls about 4% of the total US mobile phone market. Last summer Best Buy’s CEO said that his company expects to increase that number to 15%, and it looks like the retailer is well on its way.
We don’t see consumer interest for these products going away any time soon, and Best Buy is likely to get some pretty good deals on rent. Is this ramp up a good move for the company?
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Counter Culture 
If you like big box electronic stores, than yes, it would be a good move, but the majority of the mobile phone market is cornered by Apple. With Apple’s strong mobile push recently and achieving number one by far, Best Buy will not likely be able to compete, at least in this one niche. The mobile sector belongs with the specialty retailers and not Best Buy – although the focus on after market accessories and replacement parts is a good niche that Best Buy should continue and headstrong with…
It would be nice to have a Mobile Phone Store that sold every current model of every brand and could put you on any company’s phone plan. If the same store had a full inventory of accessories for the phones that would be a minor miracle.
If they piled on excellent customer service and short wait times they would have a home run!
Ray you did not really read the story very well. These stores are small 2000 sqft stores in Malls and not their big box store. Similar to an ATT store or verison store. I think with their ability to buy cheap and in bulk that this expansion is a good move for them. One area consumers are not ratcheting the belt on is their cell phones. And this also taps into one of the most lucrative comsumer markets, Teenagers. They love malls and they love cell phones. It is the perfect storm.
Jeff – the point I was trying to make, and perhaps did not make clear was that Best Buy belongs in the market they are known for, aftermarket, accessories… their business in NOT in the niche mobile phone markets.
I do understand that the stores are small, but so are the actual cell phone carriers as well… they will be just like those guys that last for one year in the mall, they carry every brand, every plan, and accessories, then close. The only mobile phone retailers that are remaining open are those of the actual carrier, verizon, at&t, sprint, etc… who will do well because of the trend you are speaking of and the purchasing power that the next generation has.
Ray – The whole point for the consideration of a strategic acquisition (like Radio Shack) is exactly because Best Buy’s primary “business in [sic] in the niche mobile phone markets.”
Best Buy wants INTO this business because it is very profitable and an acquisition of an existing retailer with synergies like product category sold, existing national market presence, primary brand name, human capital resources, etc., etc., etc. makes sense.
Best Buy has already done this once with Car Phone Wharehouse in the UK, a deal in which Best Buy immediately gained control of 2,400 European locations of small mobile phone stores.
http://www.marketwatch.com/story/best-buy-carphone-warehouse-ink-21-bln-europe-venture
It must be working if they want to do it here too.
My first reaction is if they can offer the best price and the newest phones they might do well. Best Buy certainly has the buying power to leverage that. As a consumer I don’t like being yelled at when I am walking by a phone kiosk at the mall.
The majority of the phone business will continue to be handled by the carriers and apple. Most customers are more confortable dealing with their actual suppliers, not middle men like Best Buy. A retailer does well not to chase business.
I recently went into one fo the newer locations and was impressed with the selection and array of products they offer. My question is, is brick and morter really the future of cell phone and after market purchasing? People still feel a need to see the phone, touch it, then I think they tend to buy on line. If this is going to work, I think Best Buy needs to get some deals from the providers that if the customer comes into the store and purchases there is some incentive to the customer to buy and activate in the store rather than thru the carrier.