Brightstar Corp., a leading middleman in wireless communications, celebrates its 15th birthday this fall, and like other teenagers, it’s getting bigger and adopting new interests.
Miami-based Brightstar has become one of the world’s largest distributors of mobile telephones and much more, expanding its middleman role in recent years to encompass other types of wireless devices while diversifying into related services with higher profit margins.
"We activate those mobile phones. We insure them, protect them, buy them back when they’re used. We repair them. We resell them," said R. Marcelo Claure, the chairman, chief executive officer and largest individual shareholder of Brightstar, who co-founded the company in October 1997.
"Distribution accounts for about 95 percent of our revenue but less than 70 percent of our profits. Services represent about 5 percent of our revenue but about 30 percent of our profits," Claure said. "They are both growing."
But Brightstar’s strategic tilt is toward selling more support services to wireless network operators and retailers that outsource such tasks as the design, production, shipping, warehousing, repair, repurchase and refurbishment of mobile phones. The company also aims to diversify geographically by expanding outside Latin America, its biggest regional market.
"We see tremendous opportunities everywhere in Jordan, Saudi Arabia, Egypt. So we’re looking at potential ways to enter those markets," Claure said. In addition, "there are undervalued assets in Europe right now ... We’re always looking at potential acquisitions."
Wearing blue jeans and a white dress shirt, Bolivian-born Claure said in an interview at Brightstar’s headquarters near Florida’s Turnpike that he expects the company to drive to a new peak in annual revenue this year. He said the growth catalysts will include new support-service contracts with network operators and wireless handset retailers and a new distribution deal with iPhone and iPad maker Apple Inc.
"We’ve been discussing distributing for them [Apple] for a long time. We finally signed a distribution agreement," said Claure, who declined to discuss the agreement in detail. He said Brightstar signed a "global distribution agreement" in late May with Cupertino, California-based Apple that "complements what Apple does."
Asked if the new relationship with Apple would mean transformative benefits for Brightstar, Claure smiled and said: "Anytime you sign an agreement with the world’s biggest company, it can definitely have a positive effect . . . It is definitely a milestone for Brightstar."
Prior to the Apple distribution deal, Brightstar’s biggest suppliers of wireless phones were manufacturers Nokia, Samsung and Research in Motion, the maker of BlackBerry handsets. Brightstar does some mobile-phone manufacturing on the side at its own plant in Tierra del Fuego, Argentina.
"Distribution sits at the center of what we do. So I anticipate that, in the future, distribution will always have a higher percentage of revenue," compared with services, Claure said. "But I imagine having 50 percent of our profit come from services."
For example, Brightstar recently boosted its service capability by paying an undisclosed sum to acquire LetsTalk.com. The privately held company in San Francisco, California, activates mobile phones for U.S. wireless carriers and markets phones online to consumers. LetsTalk, founded in 1999, had raised $21.5 million of venture capital from sources including H.I.G. Capital, which has an office in Miami. Brightstar will rebrand the acquired company Consensus and will keep its home office in San Francisco.