August 14, 2006 2:37 PM PDT
Helio to open retail stores
The first store will open in Santa Monica, Calif., in October. Four others will follow in New York, Denver, San Diego and Palo Alto, Calif., by the end of the year, the company said.
Helio, which is owned jointly by EarthLink and SK Telecom of South Korea, is an MVNO, or mobile virtual network operator. Instead of owning its network, the company leases wireless capacity from Sprint Nextel to deliver its service. On top of its basic cell phone service, Helio has built features, such as games, music and video, to appeal to a niche market of young, big spenders. The company also has introduced two new handsets into the market, the Hero, which costs $275, and the Kickflip for $250.
MVNOs have become popular in the past year, as big brands develop new mobile services to target narrow market segments that the larger mobile phone carriers aren't reaching. Other MVNOs, such as ESPN Mobile and Disney Mobile, already have well-established brand recognition to help bring in customers, but Helio is starting from scratch. The company sees its retail stores as a way to grow brand recognition.
"The stores are the embodiment of the brand and act as a billboard for Helio," said Jackie Foo, senior director of retail stores for Helio. "It offers consumers a different cell phone experience that's more aligned with a fashion boutique than a consumer electronics store."
The retail stores will feature lounges and "entertainment pods" where consumers can sample Helio devices and services, configure their phones, and purchase devices using automated touch screens without waiting in long lines. The stores will also feature a "Q&A bar," where Helio subscribers can get free help with their phones and use "spa kits" to clean and retouch their devices.
The stores also will be a place where Helio users can come and hang out. Shoppers will be encouraged to play video games, watch videos or check their MySpace.com accounts.
"The store is about starting a relationship with customers," Foo said. "We are creating a community atmosphere. We want people to stay and love their devices."
Helio currently sells its phones and service online and through a variety of traditional retail channels. By the end of August, the company will be in more than 2,000 retail locations, including traditional consumer electronics stores such as Fry's Electronics, as well as in record stores, campus bookstores and fashion boutiques.
The "Helio lifestyle" doesn't come cheap. Its phone subscription rates start at $65 a month for 500 minutes of talk time. Some competitors sell the same amount of minutes for about $40 a month.
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