Cellnet launches new division

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Cellnet has launched a consumer products division and signed Sony and Samsung in deals expected to be a shot in the arm for the distributor, which lost its $78 million Hutchison handsets contract when that vendor cut some five distributors mid-June.

Telecommunications specialist Cellnet has taken on Samsung's entire range of mobile phone accessories in a master distributorship deal that takes effect 1 July.

The distributor has also formed a consumer products division, signing a related contract with Sony Australia to distribute Sony's audio accessories to retailers such as RetraVision, Harvey Norman and Betta Electrical.

Peter Laver, general manager at Cellnet and head of the new division, said the Samsung and Sony deals, added to the new division, would make Cellnet the only Australian distributor in the audio-visual, telecommunications and IT space.

The Samsung deal was expected to be worth about $4 million in accessories sales. However, margins on accessories were better than those on handsets so Samsung would provide a better boost to revenues than might be expected, Laver said.

The $78 million Hutchison deal had reaped about $1.2 million net profit, he said.

"And we're still a supplier of Hutchison accessories. The other thing was only for the handset distribution and logistics," Laver added.
Cellnet would also focus on developing new business opportunities for Sony by opening up potential retail channels with non-traditional prospects such as music-centric retailers, he said.

"There's a huge amount of accessories out there in the marketplace and when you look at the home theatre market, there are a few things happening there too," Laver said.

He conceded that serious revenues flowing from the convergence of IT and audio-visual markets could be three or four years away. However, it paid to get in early, he pointed out.

The audio-visual market alone was estimated at a worth of $100 million. Cellnet would also release own-brand accessories targeting that market, the distributor said in a statement.

Gemma Lemieux, marketing manager at Samsung, said Cellnet was chosen for its specialised focus. "We believe they're one of the strongest accessory distributors in the market," she said. "We think they've got incredible focus."

Cellnet's recent loss of Hutchison Telecom and last year's of a $20 million handset deal from rival Nokia didn't faze Samsung for that reason, Lemieux said.

"They are set up to handle the distribution of accessories, which is quite different from handsets because there's so much detail surrounding the products," she said. "This is their core business."

Jacinda Jones, product manager at Samsung, said the vendor was aiming to double its sales of mobile phone accessories to $4 million this year as a result of signing Cellnet.

Lemieux said that Samsung mobile phone accessories were also available via distributors TChoice and Roadhound. TChoice would keep distributing Samsung accessories through Cellnet, she said.

Hutchison has reportedly decided to revamp its distribution approach, taking control of product distribution, credit and financing itself.

Samsung recently rolled out what it dubbed a Global Samsung Business Network to its customers and retail partners, including broad-based distributor Tech Pacific.

The network aims to cut stock inventory by 20 percent, reduce order lead times 30 percent and increase sales by improving communication between the vendor and its business partners, the company said in a statement.


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