Technology distribution company, Ingram Micro Inc. IM seems to be on track with its growth initiatives. Ingram Micro’s Canadian subsidiary, Ingram Micro Mobility Canada has partnered with Phobio – a provider of retail mobile device trade-in solutions. The objective of the partnership is to offer customers a combination of Phobio’s trade-in capabilities and its own returns inventory management solutions. The financial terms of the deal were not revealed.
Phobio offers best-in-class processes and technology, which enables better management of trade-in programs and delivers customers the best value for their old devices. Phobio currently has agreements with more than 5,000 retail locations throughout the United States, Canada and Australia.
The partnership will provide a complete solution to manufacturers, retailers, network operators, resellers and existing Ingram Micro customers in Canada. The deal will enable Ingram Micro to deliver a better retail platform and greater access to old and scrapped cell phones and accessories to its clients in an "automated retail platform" atmosphere.
Ingram Micro Mobility is a worldwide leader in mobile device lifecycle services. It offers an optimum product mix, brings new products to market and protects customer revenues. It also helps to improve efficiencies, lower costs and add value to the mobility supply chain. The offering will help Ingram to expand its supply-chain solutions portfolio.
With this mobility solution and sales channel, Ingram’s customers will see greater market opportunities, which in turn will expand their customer base.
On the other hand, leveraging Ingram Micro’s distribution channels, Phobio will be able to market its products easily and improve resale value as well.
Used Mobile Devices Piling Up?
Most people’s old mobile phones lie in a junk drawer. According to a study by Environmental Protection Agency, approximately 141 million wireless devices are ready to be recycled.
Moreover, a recent study by Ingram Micro Mobility on recycling mobile devices states that around 50% of adults are not sure about what they want to do with their used electronic devices.
The mobile industry is highly competitive and encounters significant challenges. Companies are seeking innovative technology to create value, reduce costs and deliver market-specific IT solutions and services. We believe that the recent partnership marks a continual trend of technology and product advancements for Ingram Micro, which is highly commendable. Also the deal will enable Ingram Micro to better target the market.
Conclusion
Ingram Micro has been striking distribution deals with a number of original equipment manufacturers, thus expanding its product portfolio. Its exposure to the cloud computing segment is also expected to remain its key growth driver.
Additionally, management’s focus on high-margin markets and strategic acquisitions to grow market share should help.
Going forward, Ingram Micro’s strategic relationships with network giants such as Juniper Networks Inc. JNPR, Cisco CSCO and International Business Machines Corp. IBM are encouraging.
However, not all is hunky dory for the distributor. While its services business is seeing encouraging growth, the company remains largely dependent on the PC market where shipments remain sluggish. According to Gartner’s recent predictions for 2015 released in September, PC shipments (including premium ultramobiles) will decline 7.3% year over year, primarily due to the lack of device replacement and a strong dollar.
Currently, Ingram Micro carries a Zacks Rank #3 (Hold).
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