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Distribution Strategies

TWICE: Have you seen any changes in carrier distribution strategies in 2006 or expect any in 2007?

Laikin: I think carriers are realizing the power and value of the independent/indirect channel, especially the mass retail channel, when it comes to gross activations. According to The Yankee Group, the trend in the United States is that the majority of activations are through the indirect channel. Yankee Group concluded that activation volume is not necessarily directly proportional to per-door productivity. Activation volume differs from one store to another. Just by doubling the stores, you would not necessarily double activation volume. For stores that experience fewer activations, the fixed cost exposure goes up.

Carriers want a high-value subscriber at low acquisition cost, and if the indirect channel can align itself with the carriers’ KPIs [Key Performance Indicators], it becomes an important part of the carrier’s distribution strategy. Carriers are realizing the power of mass retail and are looking to outsource logistic activities to experts like Brightpoint. The independent channel needs to continue to reinvent itself as activation commissions from the carriers are likely to decrease over time.

Misuraca: Of course, we hope to see additional emphasis placed on the indirect channel. Our ability to offer the independent wireless retailers and indirect channel real business solutions also aids in the success of the overall wireless business.

TWICE: What are some of the distribution trends that benefit you?

Laikin: The increasing adoption and penetration of converged smart devices is another exciting trend that benefits us in our advanced wireless services business unit. I believe we are playing an important role in the advent of converged devices by enabling VARs [Value Added Resellers] and system integrators to sell feature- and application-rich converged smart devices to the SMB [small-medium business] and enterprise space.