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What do you need to do then to convince them?
Have you seen our joint venture with BrightStar? Our intention is to take smartphones to the VAR channel. You know think of channels of distribution [for smartphones], you think retail. The Best Buys websites can all sell a phone to a consumer. But if you're a business, you source your business solutions from a VAR. The typical VAR doesn't sell cell phones because they have to deal with a manufacturer and a carrier. It's too sloppy. With our TDMobility program here in the U.S., we built an infrastructure, the IT systems, the tools that enable and allow VARs to sell smart phones to their clients.
Let me walk through a scenario. I'm the VAR, and I have a customer, a 10-man law firm that buys Exchange, billing systems from me, the pro A/V in the lobby, but when it comes to buying phones, each lawyer strikes their own deal with Verizon or AT&T or whoever. Now, with TDMobility, [the VAR] can source 10 Samsung Galaxys from you. The VAR comes back to TechData.com and says I want three of them on Verizon, two of them on T-Mobile, three of them on AT&T and these get this feature, [and] you get that. We customize the phone and ship it directly to the end user.
The VAR gets a one-page bill every month. I manage your cell phone business every month. The VAR doesn't have to run to [the carriers] to get all those subsidies. We guarantee the subsidies in 30 days. They get the value add, but most importantly, they get to control the environment for that customer.
I was talking recently with a [VAR] who has a law firm customer. The managing director dropped his phone in the swimming phone. He called the VAR. But, the VAR didn't sell him the phone. He said, "But I use my phone for email. You're my email guy. Fix my phone." The VAR went to Verizon and got him a phone. He didn't get paid anything for that. TDMobility is driving smart phones into the channel.
If you're AT&T, Verizon, you don't have the channel. They have SMB initiatives, so they need us. We had to build this enabling, billing infrastructure. As Apple sees that story, Apple gets excited. They don't know how to get to the channel. But like with AirBooks or MacBooks, who do they turn to? Distribution. We manage the channel. My feeling, someday when we get the iPhone, it will be after Apple has exhausted the reach of their existing distribution infrastructure and they want to get into the channel.