Best Buy: Samsung Hot, Apple and Cloud Services Not?

Best Buy is talking up Samsung, but during an earnings call didn't say much about Apple, managed services, cloud services, mindSHIFT and Geek Squad. What does that say about Best Buy's own brands for corporate IT support and automation?

The VAR Guy

May 22, 2013

3 Min Read
Best Buy CEO Hubert Joly is falling for Samsung Should channel partners follow suit
Best Buy CEO Hubert Joly is falling for Samsung. Should channel partners follow suit?

During Best Buy‘s (BBY) Q1 2014 earnings call yesterday, the retail giant mentioned Samsung 11 times, but never mentioned Apple (AAPL), cloud computing, managed services, mindSHIFT or Geek Squad. What does that mean for Best Buy and the IT channel, which has been struggling to navigate BYOD, cloud and managed services trends?  The VAR Guy has some educated hunches.

First up: Samsung’s power as a consumer and corporate technology brand is growing fast. Indeed, Best Buy has opened 525 Samsung Experience Shops in its large format stores and 390 in standalone mobile stores, according to Best Buy President and CEO Hubert Joly. By the end of the summer, Best Buy will open the remaining Samsung Experience Shops and complete a large format store space allocation initiative, he added.

During the earnings call, analysts asked if Samsung’s growing footprint within Best Buy stores has upset other device makers. 

Joly’s response: “If anything the announcement of Samsung and the deployment of Samsung has triggered more competition with other vendors who are agreeing that this is a very positive. And the more traffic is attracted to our stores, the better this is for everybody. So there will be more [store within a store relationships]. There’s nothing to [announce] today, but we are interested in doing more and we see it as win-win-win. It’s winning for the customers, it’s winning for the vendors and it’s winning for Best Buy. So this is exciting.”

What About Cloud, Managed and IT Services?

Meanwhile, Best Buy said nothing about its managed services business (mindSHIFT) and IT support business (Geek Squad) during the earnings call.

In some ways that’s understandable. Within its core market, mindSHIFT ranks among the world’s top 501 MSPs, according to MSPmentor. But mindSHIFT and sister business Geek Squad are relatively small compared to Best Buy’s top-line revenues.

Regardless, Best Buy needs to talk more about its IT services prowess. The reason: If the retail giant doesn’t tell investors about those efforts, then the media (including The VAR Guy) may start to wonder about the viability of Best Buy’s cloud, managed and on-premises IT services.

Whose Brand Matters Most?

Meanwhile, Best Buy is busy rebuilding its brand amid growing competition from Amazon and other online retailers. As part of that rebuilding process it’s tempting to promote hot third-party brands — such as Samsung.

But here’s another interesting twist: Best Buy did not mention Apple a single time during its earnings call. Plus, smartphones (1 mention) and tablets (2 mentions) were not central to the conversation.

It almost makes you wonder: Which third-party brand will Best Buy brag about in a year or two? The VAR Guy has a few educated hunches… but he isn’t ready to place any partnerhip bets at the moment.

And as for Samsung: This is more than a consumer push. The company has also launched a business marketing initiative.

Now that’s worth watching.

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