Giant British supermarket chain could succeed with iPhone rival
There’s been something of a mixed reaction to the news that the giant British supermarket chain is plotting to launch its own branded smartphone. The announcement from the company’s CEO, Philip Clark, isn’t a big surprise. That’s because the retailer’s low cost tablet - the Hudl, is doing so well. The Hudl is Android based so the smartphone – called the Hudl 2, will obviously be Android based as well. Given that the Hudl is competitively priced at £119, you can expect the Hudl 2 will be too. But will it compete head on with the iPhone? We think, yes.
Some observers have pointed out that selling a smartphone is a completely different kettle of fish from offering a low cost tablet.
Which is true – but Tesco has one huge advantage over Apple. The retailer is a highly successful MVNO [Mobile Virtual Network Operator] in its own right.
So, if customers want support with connecting the smartphone to a UK mobile network, Tesco can readily point them towards its own mobile network.
The second point which should worry Apple is the fact that the retailer has spotted the way in which the entire cellular industry is moving.
Rather than worrying about selling the hardware, as Microsoft is proving with its Nokia acquisition, it’s all about pre-installing your own services on the device.
And here Tesco is more than adequately prepared with its own BlinkBox on-demand entertainment service.
Plus Tesco is already a major online retailer with a home delivery service. On top of that there are rumours that Tesco is on the verge of launching its own mobile banking service by July .
The handset itself isn’t expected to ship until September 2014, anyway. So it has plenty of time to sign up deals for other services.
As Philip Clarke is reported as saying, “The opportunity in multi-channel retailing, in online retailing, is what led us to develop the Hudl tablet, and we’ve now sold 550,000.”
So, yes, we think that Apple, Samsung and Amazon (because of its Kindle) should be worried by this announcement.
If Tesco decides to effectively subsidise the hardware, then the competition will be even worse for its rivals.