CellStar Enters Into Accessories Agreement With Nokia: Financial News – Yahoo! Finance
CellStar Corporation issued a press release on today (July 7) that it has entered into an agreement with Nokia Inc. to provide Cellstar’s distribution channel with Nokia accessories.
CellStar started to focus on the more profitable accessories from manufacturer’s in 2005. Cellular handsets have tight margins for manufacturers as they are heavily subsidized by carrier’s reselling the handsets to customers or end users. This leaves little opportunity for distribution specialists to make profitable earnings from the value added service they can provide expanding distribution channels.
Accessories on the other hand do not require heavy subsidization from carriers. They often sell on the merits of the product itself, which typically doesn’t cost more than $100 to the end consumer. Many cellular accessories return very high margins both to manufacturers as well as to distributors. Accessories tend to be much less complex in technology and design and do not devalue in price as quickly as the actual handsets.