Study: Mass Merchants Rival Carriers for Retail Smartphone Sales

Carrier Verizon’s stores (VZ) generate more than half of U.S. retail smartphone sales but big box retailer Best Buy (BBY) and mass merchants including Target (TGT), Costco (COST) and Walmart (WMT) have become significant rivals, together accounting for some 25 percent of retail smartphone sales.

The data comes from the results of a new study by Consumer Intelligence Research Partners (CIRP) obtained by AllThingsD. The researchers also found that Apple’s (AAPL) retail stores, despite selling only the vendor’s iPhones, produce about 11 percent of retail smartphone sales, while Best Buy, which sells handsets from major suppliers, accounts for about 13 percent of units sold.

By comparison, smartphone sales through Verizon’s stores make up 57 percent of the total market. Online outlet Amazon (AMZN) and eBay (EBAY) are not significant players, together comprising about 9 percent of overall sales.

“Surprisingly, in light of its recent financial troubles, Best Buy has significant power,” said CIRP co-founder Michael Levin via the AllThingsD account.

A critical factor behind Best Buy’s ascension in smartphone sales is the retailer’s inventory—it stocks products from the major smartphone suppliers and works with all the carriers. It’s also helped that smartphone kingpins Apple and Samsung both have opened dedicated store-within-store kiosks at Best Buy locations. And, Microsoft (MSFT) in June kicked off a plan to open 600 such outlets in North America.

“So, all major manufacturers and operating system producers, and even the major carriers, need Best Buy,” said Levin.

iPhone Store Sales

As for the iPhone, earlier this year, Apple chief executive Tim Cook said he wanted more iPhone sales to run through Apple’s stores. It looks like he’s making his point—in the vendor’s Q3 2013, its stores produced unit growth of 36 percent per store per week compared to the same quarter last year.

Apple’s store plans for fiscal 2014 include opening 30 new outlets, 20 of which will reside somewhere besides the United States. In addition, the vendor intends to remodel about 20 stores next year. Some 99 million people entered Apple stores during the quarter, or 18,500 per store per week.

According to AllThingsD’s account of the CIRP study, Apple stores produced about 25 percent of iPhone sales. Among the carriers and retailers, AT&T generated 21 percent of iPhone sales, followed by Verizon at 18 percent, Best Buy with 13 percent and Sprint, Amazon and the mass merchants each yielding about 5 percent of overall sales.