\The company will likely focus on SIM-free phones and, if margins remain weak, could imminently wind down the division entirely.

AO acknowledged it faces “continued headwinds” in mobile, with revenue in the segment falling 11.2 per cent year on year. Key factors include a declining market, waning consumer interest in contract bundles, and rising customer acquisition costs, particularly through affiliate channels. “We do not have the appetite for continued losses in this area,” AO said in its results statement, underlining its strategic realignment.

But £29.7m Revenue from musicMagpie acquisitio has boosted its recommerce ambitions

AO acquired MobilePhonesDirect in November 2018 for £35 million but has now recorded a £19.6 million write-down on the business. This contributed to a 40 per cent drop in statutory profit, down to £20.6 million for the year.

Back in 2018 AO World announced ambitions to become the largest online-only mobile retailer in the UK after its acquisition of Mobile Phones Direct.

AO World planed to use MPD and its ability to offer airtime packages to increase business for AO Mobile, an internal division of the company.

Challenges

Despite the challenges, AO will not exit mobile entirely. Instead, it’s reshaping its strategy to focus on SIM-free devices, credit-backed propositions, a forthcoming MVNO launch, and the sale of refurbished phones. The company is shifting to a more profitable, direct-to-customer model.

Strong contribution from musicMagpie

AO also highlighted a strong contribution from musicMagpie, the recommerce specialist it acquired in December 2024.

The business delivered £29.7 million in revenue over the four months to March 2025, helping AO grow recommerce revenue to £42.6 million, up from just £10.6 million the previous year — a near 300 per cent increase.

Despite the revenue boost, musicMagpie posted a £1.7 million pre-tax loss in the period since the acquisition. AO excluded this from its like-for-like adjusted profit before tax, which rose 32 per cent year on year to £45.2 million.

The total cost of the acquisition was around £35 million, including £9.8 million in cash, £19.1 million in debt repayment, and £3.3 million in advisory costs.

AO’s CEO and founder, John Roberts, said the deal strengthens AO’s refurbished tech offering and supports its ESG strategy: “We expect that in time this will improve the affordability of many products on AO.com for customers, helping to further differentiate the AO proposition.”

The two businesses’ models are described as “highly complementary,” and their integration is expected to deliver efficiencies across AO’s vertically integrated reverse supply chain.

AO recognised £12.1 million in goodwill from the deal, alongside £11.2 million in intangible assets, including brand and technology. These valuations are still provisional. Looking ahead, Roberts struck an optimistic tone: “Given the size of the prize — with a total addressable market of over £28bn — and the fantastic momentum we’re seeing across the business, I couldn’t be more excited about the next 25 years. In many ways, we’re only just getting started.”

]]> https://mobilenewscwp.co.uk/news/article/ao-likely-wind-contract-mobile-business-losses-mount/feed/ 0 https://mobilenewscwp.co.uk/news/article/ao-joins-refurbished-revolution/ https://mobilenewscwp.co.uk/news/article/ao-joins-refurbished-revolution/#respond Tue, 02 May 2023 10:12:55 +0000 https://mncwp.tailrd.cloud/ao-joins-refurbished-revolution/ AO is to sell refurbished ‘as new’ mobile phones through its Mobile Phones Direct brand.

AO is to sell refurbished ‘as new’ mobile phones through its Mobile Phones Direct brand.

The new range includes Apple’s iPhone 14, available on contract, handset and SIM-only plans, as well as a range of other popular mobile devices up to £125 when compared to buying new.

MobilePhonesDirect.com  became part of the AO group in 2019

The phones are described as an ‘As New’ standard and are said to be indistinguishable from new models. They are shipped in recyclable brown packaging with a 12-month warranty.

Scott Hooton, AO’s Mobile Director, said:

“There is a huge demand for more cost-effective options to upgrade or replace mobile phones. Consumers are still keen to keep up with the latest in technology. Our as new phone deals are between £72 and £120 over a 24-month contract cheaper than “brand new” equivalents.”

Mobile Phones Direct is currently offering “as new” Apple iPhone 13s for £30 per month with the iPhone SE available for just £16 per month with no upfront cost.

“These iPhones have been returned by customers because of potential faults but have been rebuilt to the same standard.

 

 

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He takes over from group services director Paul Dawson who has has been leading mobile alongside mobile specialists in AO’s commercial, trading and supply teams.

Before that, Richard Baxendale was the MD of Mobile Phones Direct and left in December 2019. He is now executive VP, Global Sales at Likewise.

Hooton has been in the mobile industry for around 30 years. As well as leading roles in Ophones4U he held senior positions with Carphone Warehouse.

“AO and Mobile Phones Direct are now well placed to bring fantastic value, range and five star service to customers. I’m thrilled to be joining the AO team and excited to release the full potential of Mobile Phones Direct” he said.

Mobile Phones Direct does connections with Vodafone, 02 and Three alongside a full range of handsets from all major manufacturers. It was named uSwitch Reseller of the Year in 2022.

Richard Baxendale has rejoined Brightstar as chief business development officer, having left his previous role as managing director of AO Mobile.

His remit includes overseeing global business development for Brightstar’s device protection business as well as its broader portfolio of device lifecycle services in Europe. He is also president of Brightstar’s European device protection business.

According to Companies House filings, Baxendale left his role at AO at the end of March.

Baxendale’s initial stint at the distributor occurred from 2001 to 2007, when he rose from associate sales director to business development director.

He then took on the UK and Ireland managing director role of Tech Data Mobile, a joint venture between Tech Data and Brightstar, where he became managing director for sales and then vice president of services for Europe before leaving in 2015.

After taking some time out from the industry to pursue an MBA, he became CEO of online retailer Mobile Phones Direct (MPD) in 2017. Following MPD’s acquisition by retailer AO World in 2018, Baxendale became managing director of AO’s mobile business in 2019, at a time when it experienced significant growth.

Baxendale’s appointment is Brightstar’s first major hire since it bought a majority stake in mobile repair firm WeFix, and the first since the departure of Mike Mitchinson as UK MD in February after just six months in the role.

Earlier this year, the distributor also brought in David Brassington from Tech Data as head of network operators, and Jon Charters from Sony Mobile as head of retail.

Baxendale and Brightstar have been reached for comment.

HMD Global’s latest two Nokia phones are now available to buy in the UK.

The Nokia 800 Tough and 2720 Flip are feature phones with 4G capabilities. They were previously announced at IFA 2019, alongside the smart 7.2 and 6.2 devices, which were released earlier this month.

The 2720 Flip runs on KaiOS, and comes with 4G, Google Assistant and pre-loaded Facebook and WhatsApp apps. More apps are available to download from the KaiOS app store.

It is available in Black for £89.99 from John Lewis and Carphone Warehouse, and will be available from Argos, Amazon, AO, A1 Comms and Go Mobile next week.

HMD Global’s chief product officer Juho Sarvikas said: “With Nokia 2720 Flip we wanted to bring modern everyday essentials like 4G, WhatsApp and the Google Assistant to a familiar flip-phone format, that fans both love and remember. Nokia 2720 Flip is the latest addition to our Originals family and joins the Nokia 8110 4G as an excellent option for people looking for a smarter feature phone.”

The Nokia 800 Tough is HMD’s first rugged device, with an IP68 rating and military grade MIL-STD-801G compliance, permitting it to withstand temperatures from -20C to 55C.

It also runs on KaiOS, coming pre-loaded with Google Assistant, Facebook and WhatsApp and with the ability to download more apps from the KaiOS app store. It is available from Amazon for £109.99.

Sarvikas added: “With Nokia 800 Tough we’ve taken durability to the next level, making sure it’s waterproof, dust-proof and climate protected. With the added drop protection, Nokia 800 Tough is truly built tough. And of course, we didn’t want to give our fans just a durable device, so we’ve made sure Nokia 800 Tough is built with today’s needs in mind. That’s why we’ve included the Google Assistant, social apps and 4G connectivity, for all the best experiences on a smart feature phone.”

HMD Global’s latest Nokia smartphones have launched in the UK.

The Nokia 7.2 and 6.2, which were announced at IFA last month, are available from the following retailers:

• Amazon, John Lewis, SDG, AO Mobile, Carphone Warehouse at £249 (Nokia 7.2)
• Carphone Warehouse exclusively at £199.99 until December 3, more retailers thereafter (Nokia 6.2)

The 7.2 features a 48MP triple camera setup, with 64GB internal storage that can be increased with a Micro SD and 4GB RAM. It runs on a Qualcomm SDM660 Snapdragon chipset with Android 9 OS. Its colours are Cyan Green, Charcoal and Ice.

The 6.2 features new PureDisplay screen technology, which enables real-time HDR photography. It runs on a Qualcomm SDM636 Snapdragon chipset with Android 9 OS. It comes with 4GB RAM and 64GB of internal storage, in Ceramic Black and Ice colours.

HMD Global UK and Ireland general manager Sarah Edge said: “Consumers across Europe are now holding onto their smartphone for as long as 30 months. They seek a smartphone experience that stays fresh and secure over time. We are the only brand to have our entire portfolio running on the latest version of Android, and the only brand to bring the latest features across all price segments, not just our flagship devices. Not only this, but we also keep your phone secure by giving you monthly security updates for three years. The Nokia 7.2 and Nokia 6.2 will be a phone that is not disposable, it will just keep getting better with time.”

Vodafone have today signed a new strategic partnership with leading online electicals retailer AO.

The new deal will include services such as Vodafone Unlimited and its recently launched range of unlimited mobile data plans for both 4G and 5G as well as VOXI, Vodafone’s youth brand that offers unlimited data on social media.

The partnership deepens the range of products available to AO customers.

Vodafone UK CEO Nick Jeffrey said: “We’ve partnered with AO to give consumers more choice and better value, whether through our unlimited data plans and entertainment packages for households with multiple devices, or VOXI, our youth brand that offers endless data on social media.”

AO founder and chief executive John Roberts added: “AO is determined to bring value, choice and service to customers in the UK mobile phone market and this is another big step on that journey.

“As an online retailer, we can offer lower prices for customers. This extended partnership with Vodafone will also provide them with access to some of the very latest network innovations, especially 5G, at a time when connected devices are playing an increasingly central role in people’s lives.”

The UK’s first mobile
phone ‘slow lane’ has been installed in Manchester after research
revealed how careless Brits are when walking with their mobile.

Research found 96 per cent of Brits have experienced someone walking and not paying attention because they were too busy looking at their phone, in the last year.

In total 1,500 people were surveyed with the research conducted by 3GEM Research and Insights.

The trial sees two
adjacent 75-metre long (247ft) mobile safe lanes installed along
Hardman Boulevard in the Spinningfields district, in what is thought
to be the first of its kind in Europe.

Along the lanes are
arrows and signs that mark out the separate walking lanes on the
pavement exclusively for slow-walking smartphone users.

In total three-quarters
of Brits (75 per cent) said they are guilty walking and using their
phone at the same time.

The startling findings
has led 19 per cent of respondents to believe the government and
local councils should step-in or provide proper guidelines.

AO Mobile MD Richard
Baxendale said: “We have to be realistic and responsible when it
comes to the way society is changing. Our research found Brits being
distracted by technology when walking is becoming an issue people
want tackled.

“Our trial slow lane
is an important step that may well be adopted by other cities in the
future.”

Demographics

The study also found
that females are slightly more prone to ‘distracted walking’ with 79
per cent claiming to have nearly bumped into someone or something in
the past six months while texting. For males this figure was 69 per
cent.

Unsurprisingly the
younger demographic of 18 to 24 year olds admitted to walking and
using their handset the most, while the over 65 age group recorded
the lowest amount at 42 per cent.

Mancunians are the
worst offenders for careless walking with 91 per cent saying they
regularly walk and look at their phone.

Manchester pips both
Glasgow and Oxford with 89 per cent, while Liverpool and London (both
84pc) and Cardiff (82pc) and Coventry (81pc) follow close behind.

However out of all the
cities, Durham (55pc) was the ‘safest’, followed by Leicester (59pc)
and Middlesbrough (60pc).

Online electronics and appliances retailer AO has launched a website dedicated to its mobile offering.

The website, which has been launched today (August 8) will feature an extensive choice of handsets from a number of vendors with plans available through the big four operators.

AO Mobile is run by
Mobile Phones Direct, who originally set up as a high-street dealer
in 1992

MPD were acquired by AO
World in December last year, as the retailer identified a gap in its
wide portfolio of electronics.

AO founder and chief
executive John Roberts has hailed the launch as a “gamechanger for
customers”.

“Customers tell us
that they find buying mobile and connectivity complicated. From
today, we’re making it easy to choose what’s best for them with
easy-to-understand pricing and fantastic service.

“We can make it
cheaper because AO Mobile customers don’t have to pay for hundreds of
high-street stores with thousands of sales staff.”

Some of the deals
include the Samsung A10 on a Vodafone tariff for £24 per month, the
Huawei P30 Lite for £29 through EE, or an exclusive O2 deal for the
Samsung Galaxy S10 for £55 per month with 120GB of data.

This month AO Mobile
customers can also receive a digital reward card that comes with £250
pre-loaded to spend online at AO.com.