(last updated July 2019)
What has been happening in the mobile phone sector
ONS figures show that for the year ended March 2017 nearly two thirds of the money spent on communication was spent on a mobile phone-related cost and that in 2017 UK adults spent more time on their mobile devices than they did on desktop and laptop computers. Online retail sales exceeded £133bn in 2016. Although this figure increased by 12.1% in 2017 the rate of growth slowed by almost 5% compared with 2016 due to rising inflation, low real-term wage growth and the uncertainty surrounding the Brexit negotiations. With over half of visits to retail websites reported to have been made via mobile devices, smartphones have now become firmly established as a necessity of modern day living. Nevertheless, the market for smartphones is slowing as it becomes saturated and manufacturers are placing more reliance on upgrades and rolling yearly contracts to gain control of the distribution market.
Mobile phone stores must stay on top of the constant change and evolution of mobile technology if they want to be successful. They need to be aware of, and able to supply and advise on, new types of devices, services and technologies. As the market slows, they need to promote the advantages of the new technology available on the latest available handsets. They also need to be aware of changes that mean some devices have fallen out of favour, such as feature phones, sales of which have continued their rapid decline.
There are four major network operators in the UK, O2, Vodafone, Three and EE (Everything Everywhere) - formed by the merger of Orange and T-Mobile, although these brands continue to exist. The coverage provided by the networks continues to improve, with the superfast 4G currently being rolled out across the UK (towards an agreed target of 90% of the population by the end of 2017). As well as the network operators, there are very many mobile virtual network operators that use airtime provided by one or more of the four network operators. These include giffgaff, Virgin Mobile, Tesco Mobile and so on.
The features available on mobile phone handsets improve every year as technological advances allow manufacturers and network operators to provide more to the customer. The latest smartphones work on an operating system similar to a mini computer. They have large screens and offer advanced computing capability, calling capabilities, video conferencing, full internet capability, excellent quality cameras, media players, GPS navigation and so on. The 2010s also saw the launch of 'smartwatches'. These use a mobile operating system and are like tiny smartphones that you can wear on your wrist.
The cost of a mobile phone (with SIM) to the customer is greatly subsidised by the network operators who feel that by reducing the initial cost of the handset they will encourage more people to sign up to their network and so recoup the costs through contract payments and call charges.
Very many mobile phone retailers now sell tablets such as the Apple iPad with or without SIM cards. (While some tablets have the option of connecting to the internet via a data SIM as well as WiFi, many others are WiFi only.)
You will face competition from a number of different types of outlet and may have to offer a different service to the majority to attract sufficient custom. In recent years, the network providers have greatly increased their own presence on the High Street and are likely to be significant competitors. Nevertheless, as smartphone ownership has become so widespread, there has been a growing demand for services like repairs and unlocking which aren't really offered by the networks' retail outlets. According to recent research, independent mobile phone shop numbers actually increased in the mid-2010s, having fallen in the late 2000s. As mobile technology is used more and more in everyday life, the demand for mobile phones remains strong. There were concerns that the vote in June 2016 to leave the EU could soften spending on electricals, including mobile phones. Although no immediate impact was detected, the fall in the value of the pound and rising inflation led to a fall in consumer confidence in 2017, which continued into 2018. Little change is forecast for the foreseeable future as the economy continues to grow only slowly.
Keep up to date with developments
The Federation of Communication Services (FCS) is the representative body for the UK business-to-business mobile communications sector. Visit the FCS website for further information.
Mobile magazine contains features and articles of interest to those in the mobile communications sector. Visit the Mobile magazine website to find out more and to subscribe online.
Ofcom, the telecommunications watchdog, provides a great deal of information on the telecommunications sector as a whole, including the structure of the mobile market. You can get more information from the Ofcom website.
You will be able to obtain a lot of useful information if you go to a trade show for the mobile phone sector. The Exhibitions website has detailed information of forthcoming exhibitions.