Dixons and Carphone Warehouse Plan Merger

Proposed Tie-Up Could Usher in the Age of the Connected Toaster

After both firms confirmed rumours that they were in talks in February, Dixons Retail and Carphone Warehouse have finally announced details of a merger.

This announcement reflects the coming together of the mobile and consumer electronics segments. We’re about to see our digital lifestyle extending out of the living room into the rest of the home. Eventually, almost everything will be connected; ovens, toasters, cameras, washing machines, fridges, lights, alarm systems and so on. Many of these devices will be controlled by our smartphones and tablets. So a merger between a consumer electronics retail giant and one of the high street’s leading mobile distributors is a logical and forward-thinking move for both companies. The combination of two well-known brands will create a potent force on the high street that will offer significant opportunities to both in terms of scale, cost-cutting and distribution.

The motivation behind the deal reflects some of the challenges mobile phone retailers like Carphone Warehouse are facing. UK operators are cutting their dependence on distributors in the face of falling revenue. Indeed, 3 recently ended its relationship with Carphone Warehouse altogether. Additionally, the smartphone market in the UK is rapidly approaching saturation and more people are buying mobile subscriptions on a SIM-only basis.

The announcement has been getting a lot of coverage in the press. Here are a few examples.

 

 

 

To read our full analysis of the deal, please click here.