\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/musicmagpie-will-sold-ao-10-million/ https://mobilenewscwp.co.uk/news/article/musicmagpie-will-sold-ao-10-million/#respond Wed, 02 Oct 2024 10:39:44 +0000 https://mncwp.tailrd.cloud/musicmagpie-will-sold-ao-10-million/ AO is to buy musicMagpie £10 million. The deal is structured as a “scheme of arrangement” and is expected to be finalised pending court approval. Around 54 per cent of MusicMagpie shareholders, including key institutions, have shown support for the acquisition. A scheme of arrangementis a legal process used in corporate transactions, including mergers, takeovers,

A statement from music Magpie confirmed that acquisitive talks by BT and Aurelius investment had halted.

“The Board of musicMagpie notes the announcement on 24 November 2023 from Aurelius Investment Advisory Ltd on behalf of investment entities managed or advised by it or its affiliates, and the announcement on 27 November 2023 from BT Group plc, that they do not intend to make an offer for musicMagpie.

“Following the announcement by the Company on the 20 November 2023, which commenced the offer period in respect of the Company in accordance with Rule 2.4 of the Code (“Offer Period”), the Company continues to seek potential buyers for the entire issued and to be issued share capital of musicMagpie, and, as such, remains in an Offer Period.  There can be no certainty that any offer for the Company will be made, nor as to the terms of any such offer. Accordingly, shareholders are advised to take no action at this time”.

The company says it will accept old chargers and Lightning cables as part of any trade-in until the end of November.

“While lightning cables can still be used with older iPhone models, the potential for e-waste generated from this transition may not be immediate. However, as these devices cease production, an estimated 14.4 million households could find themselves with surplus lightning cables. Throwing lightning cables into regular rubbish bins will lead to them ending up in landfills, where they can release zinc, copper, and plastics into the soil and water sources”, said musicMagpie chief commercial officer Jon Miller.

The Global E-waste Monitor Report has revealed the UK as the biggest generator of e-waste in Northern Europe and the third-largest in Europe overall, discarding 1.598 kilotonnes of tech per capita. Statista reports that 51 per cent of UK households own an iPhone and at least one lightning cable.

Jon Miller will be a speaker at the Mobile News Circular Summit conference on November 15, delivering a keynote presentation on pricing methodology in the secondary market.

They add to the initial rollout of 290 SMARTDrop Kiosks into Asda stores which started in November 2020 and was completed across the UK last October. The Trafford Centre (Manchester) kiosk was announced earlier this year.

The kiosks are a faster and easier way to recycle phones for instant cash. Customers take their phone to a kiosk, receive a valuation, deposit it and then have the money paid to their bank or PayPal account within minutes.

SMARTDrop Kiosks now account for 45 per cent of musicMagpie’s supply of consumer devices

musicMagpie CEO and co-founder Steve Oliver said: “SMARTDrop Kiosk in The Trafford Centre has been one of our most successful installations to date. With millions of people visiting each of these new sites every year, these will serve to increase brand awareness and promote the service making it easier than ever for customers to trade in their phone for cash while doing something positive for the environment.”

musicMagpie has launched a sustainability partnership with retailer Asda following a successful trial.

The partnership will enable Asda customers to buy and sell pre-owned consumer technology and drive a circular ecosystem looking to prevent waste.

It follows an initial trial that saw 15 Asda stores introduce musicMagpie’s SMARTdrop kiosks in 15 stores for customers to recycle unwanted phones for cash.

This service will roll out to up to nearly 300 stores next year, after around 3,000 smartphones were traded in through the scheme, with over £800,000 paid out to customers.

Customers are given an instant valuation upon bringing in their old phone and paid instantly with the value transferred to either the customer’s bank or PayPal account.

The new agreement extends the products to other refurbished technology products such as tablets and pre-owned entertainment products with musicMagpie through Asda’s website and mobile app.

Strong partnership

It builds on the strong relationship formed between musicMagpie and Asda, with the retailer already selling musicMagpie’s pre-owned DVDs and CDs in its stores since August 2020.

musicMagpie CEO and co-founder Steve Oliver said: “The extension of our partnership with Asda will help us to achieve our clear strategic goal of ‘buy more, sell more, rent more’ by making it even easier for consumers to sell to musicMagpie and make a decision that is both smart for them and smart for the planet.”

Asda senior director of partnerships Matt Harrison added: “Our exclusive partnership with musicMagpie has been developed with the long-term view in mind and it is fantastic to see this vision achieved through a wider roll out in Asda stores.”

iPhones retain the most value according to recycler musicMagpie.

But they still lose around 41 per cent of their value in the first 12 months and 60 per cent after a 24-month contract period.

Samsung handsets depreciate by 64 per cent after 12 months and 77 per cent after 24 months. Google and Huawei devices plummet by 83 per cent and 87 cent respectively in the two years after launch.

These stats came from musicMagpie’s analysis of trade-in values of the most popular handsets from Apple, Samsung, Google, OnePlus and Huawei for 36 months from their launch date.

The data was based on musicMagpie’s ‘good’ trade-in prices on unlocked phones. The estimated drop in the value of iPhones after a new model is released was calculated using the average drop in the value of the new model’s predecessors after new releases from 2018 and onwards.

musicMagpie calculates people could be are losing out on £3,400 over their lifetime by delaying trading in their old phone.

“Trading in old devices ahead of new phone launches is the way to get the best price for them. By regularly holding on to unused devices, people are losing out on the value they hold, which adds up to a considerable sum over time”, said musicMagpie CEO Steve Oliver

A musicMagpie survey of 2,000 adults shows that the release of new models plays a big part in driving upgrades. Around 27 per cent of iPhone users will be upgrading to the ’13’. A third of them said that 5G was the reason they would get the ’13’.

The survey found 14 per cent of those questioned forget to trade in their old phone sooner while 13 per cent can’t be bothered. The average household is thought to have around 11 unused devices.

Samsung devices can lose up to 12 per cent of their value following the first month of a new model being released and a further 21 per cent after three months, research from musicMagpie has indicated. 

If sold now, customers trading in a Samsung Galaxy S20 can expect up to £310, while those with a Samsung Galaxy S20 Ultra could get up to £364, but these might only be worth £245 and £288 in three months’ time.

The research also suggested that people may also want to reconsider buying a new phone as soon as it’s released given that on average, new Samsung models lose 64 per cent of their value after being on sale for 12 months and then 74 per cent after 24 months.

The news comes as musicMagpie releases its 5th Annual Phone Depreciation Report with the latest statistics for 2021. More information can be found at https://www.musicmagpie.co.uk/phone-depreciation/

The annual report uses trade-in data to track the value of the most popular handsets from Apple, Samsung, Google, OnePlus, and Huawei. 

musicMagpie chief marketing officer Liam Howley said: “With the imminent launch of the Samsung Galaxy S21 lots of people are planning to upgrade. From our data, it’s clear that those people should sell their old phone now rather than wait around to get the best price for it.

“We lock in a customer’s trade-in price for 14 days, giving them the opportunity to secure the best possible price while sorting out their new phone. 

Trading in your old phone is good for the environment too and encourages a circular economy whereby phones are recycled, refurbished and reused so it’s something anyone planning to upgrade should consider.”

Tech trade-in site musicMagpie has launched a mobile rental service for select Apple and Samsung devices.

The new service, which is live as of today (November 9), offers customers a chance to pay a monthly payment for a device with no upfront cost.

Customers then have the option to either upgrade to a newer model every 12 months at no extra cost, keep the same device at a lower monthly cost, or return the phone and end their agreement.

Current devices available to rent are iPhones ranging from the iPhone 7 to the iPhone XS Max, and the Samsung Galaxy S9+.

Every device ordered as a rental comes with a free case and screen protector worth up to £40, with musicMagpie fitting the screen protector ahead of delivery. The devices also come with a lifetime warranty that covers technical defects and faults caused by workmanship or materials.

“It’s brilliant that we have been able to offer our customers a far more flexible and affordable way of owning a phone, with no major upfront costs and lengthy, expensive contracts,” said musicMagpie CEO Steve Oliver.

“We’ve seen a huge switch from the product economy to the subscription economy in recent years and the subscription model is something that is becoming more popular with consumers, so we wanted to give our customers that same experience but with their mobile phones.”

Oliver added that the move made sense from an environmentally friendly standpoint, as consumers were given more options to get refurbished devices, and musicMagpie will recycle or resell all returned devices.

“Renting a phone is also a far smarter choice for the environment as it encourages the reuse of products, keeping them in circulation for longer and mitigating the need to create new products which involves mining for precious metals,” he said. “It will also help to reduce the frighteningly increasing problem of e-waste.”

musicMapgie says it will expand the number of phones available to rent “in the near future”, as well as offer other products such as MacBooks, tablets and wearables.

Apple and Samsung were the big winners in the 20 categories for the What Mobile Awards 2020 in which 33,752 people cast their votes for the best mobile products and services.

The Apple iPhone 11 Pro was voted Best Smartphone and Apple also picked up three more wins for Best Device Manufacturer, Smartwatch, and Service and Repair (AppleCare).

Samsung took three first prizes for Best Value Smartphone under £300 (Galaxy A41), Rugged Device (XCover Pro), and Fitness Wearable (Galaxy Fit E).

On the network front, EE was judged Best Network and Customer Support.

Lycamobile took first place for MVNO and the online retailer award again went to Mobile Phones Direct.

For recycling Music Magpie won the award for the fifth year in a row with a landslide victory. Full results below:

Smartphone – 33,341 Votes

Winner: iPhone 11 Pro – 50.9%

Second: Samsung Galaxy S20 – 30.26%

Third: Huawei P40 Pro – 5.29%

Smartphone under £300 – 29,825 Votes

Winner: Samsung Galaxy A41 – 39.93%

Second: Huawei P30 Lite – 22.14%

Third: Nokia 5.3 – 5.3%

Rugged Device – 28,730 Votes

Winner: Samsung Xcover Pro –  48.15%

Second: Caterpillar CAT S52 – 21.22%

Third Land Rover Explore R – 16.07%

Best Network – 29,342 Votes

Winner: EE – 35.95%

Second: Vodafone – 24.60%

Third O2 – 24.49%

MVNO – 28,745 Votes

Winner: Lycamobile – 33.20%

Second: Sky Mobile – 14.18%

Third: Tesco Mobile – 12.97%

Device Manufacturer – 28,641 Votes

Winner: Apple – 45.09%

Second: Samsung – 35.08%

Third: Huawei – 5.77%

Fitness Wearable – 27,770 Votes

Winner: Samsung Galaxy Fit E – 46.10%

Second: FitBit Versa 2 – 32.91%

Third: Garmin Viviosmart – 9.68%

Smartwatch – 27,545 Votes

Winner: Apple Watch Series 5 – 55.27%

Second: Samsung Active 2 – 29.37%

Third: FitBnit Versa Lite – 7.89%

Smart Home Hub – 27,138 Votes

Winner: Amazon Echo Dot – 39.98%

Second: Samsung Smart Things – 21.75%

Third:  Apple Homepod – 18.99%

Device Retailer Online 26,646 Votes

Winner: Mobile Phones Direct – 31.84%

Second Mobiles.co.uk – 28.98%

Third: SmartCellular.co.uk – 5.94%

Device Retailer (High Street) – 26,553 Votes

Winner: Carphone Warehouse – 23.12%

Second: EE – 20.81%

Third: Vodafone – 15.89%

Accessories Retailer Online – 25,255 Votes

Winner: Mobile Fun – 8.17%

Second: Firebox – 26.48%

Third: Mobile Madhouse – 24.47%

Recycling – 25,877 Votes

Winner: Music Magpie – 46.64%

Second: Samsung Recycle – 16.71%

Third: O2 Recycle – 11.20%

Insurance Provider – 24,271 Votes

Winner: Protect Your Bubble – 30.82%

Second: Insurance2go – 26.77%

Third: Gadget Cover – 16.00%

Customer Support – 25,165 Votes

Winner: EE – 22.56%

Second: O2 – 16.75%

Third: Vodafone – 16.30%

Service and Repair – 24,202 Votes

Winner: AppleCare – 38.78%

Second:: O2 Repair – 14.61%

Third: Phone Service Centre – 14.37%

Accessory Manufacturer – 23,929 Votes

Winner: Logitech – 31.73%

Second: Belkin – 21.88%

Third: Tech 21 – 10.96%

Bluetooth Speaker – 23,827 Votes

Winner: Sony SRS XB50IG – 29.83%

Second: B&O Beosound A1 – 25.42%

Third: Sonos Move – 19.07%

Headphones – 23,499 Votes

Winner: Sony WH-1000XM3 – 40.90%

Second: Skullcandy Crusher ANC – 16.79%

Third: Sennheiser HD4OBT – 15.98%

Earbuds – 23,093 Votes

Winner:Sony WF-1000XM3 – 43.76%

Second: Skullcandy Push Ultra – 20.24%

Third: Jabra Elite Active – 12.67%