Lisa Bowersock, director of public relations for AirTouch's recently acquired US West New Vector markets, said many consumers who have never used wireless service before may not understand the concepts of battery drain and recharging. Along with a tutorial, perhaps a second battery or a cigarette-lighter adapter will help them be comfortable with their phones and, thus, use them more.

Making sure that when the customer walks out, the phone meets his expectations is critical, she said.

Bowersock said AirTouch research has shown that customer dissatisfaction with wireless service can be a result of the equipment instead of the actual service. She added that promoting accessories gives AirTouch an opportunity to keep in touch with the customer base as well as to upgrade the customer's equipment.

Sales Channels

Accessories find their way to the end user through several channels, and although carriers have a hand in most of those, specialty stores, catalogs and even office-supply stores are jumping on the wireless bandwagon.

Batteries Plus, a national business-to-business and retail battery chain, prides itself on offering "1000s of batteries for 1000s of items," including batteries for all the major wireless phone brands. The company has 100 stores in 28 states and hopes to have 250 stores by 2000.

There also are catalogs that offer wireless phone batteries and other battery-related accessories such as cigarette-lighter adapters.

Office supply and other large retail stores also offer a limited supply of wireless phones and accessories, but the volume, at least to this point, hasn't caused much of a threat to carriers.

"If a place is selling accessories, they will usually carry some line of service as well," Bowersock said.

She added that the mix of retail partners has changed dramatically, no longer consisting solely of cellular specialists and electronics stores but including office supply stores and grocery stores as retail partners.

"What we're finding is not necessarily that the expanding base of retailers is impacting our sales and service because we are partners with most of them," she said.

Still, however, anything that creeps into a carrier's profit margin, no matter how little, is not good news, Cole said, so carriers are continually looking for ways to expand their sales of accessory items.

Bundling accessories with promotions is still a popular method of introducing accessories to consumers. Cole said some of the carriers are developing marketing programs, such as GTE's FamilyNet, around what is called "community of interest." Accessories fit into the programs nicely as a sub-element of the marketing campaign, Cole said.

AirTouch deals with a third-party entity called Wireless Stockroom, which carries a full line of accessories, said Melissa May, director of public relations for AirTouch's southern California markets. Customers that churn from other carriers may have phones that AirTouch does not sell, so the connection with the Wireless Stockroom via a toll-free number allows customers to get accessories for those phones. AirTouch also uses that toll-free number in bill inserts and its newsletter as a means to keep in touch with its customer base and to offer accessory promotions.

"When they call that number, the call is answered, 'AirTouch Accessories Program,'" May said, "so it's seamless to our customers."

More carriers also are taking advantage of the Internet as a means of selling accessories. Several of the larger carriers, such as Ameritech and Southwestern Bell Wireless, already have on-line shopping on their Web sites, and others are looking at it for the future.

Because on-line shopping in general has been slow to take off, carriers can't expect to go right in and make money hand over fist. The Internet is just part of a larger strategy.

"Like everything when you first turn it on, very few things actually make a lot of money," Cole said. "It's a long-term play."

Smaller carriers such as Cellular South are not yet looking at the Internet, content with how the other channels have been working. Jett Herring, Cellular South purchasing manager, said that people come to its stores as much for advice as for the products.

OEM or Aftermarket?

The accessory issue is not simply one of distribution channels. The decision over whether to use OEM accessories, aftermarket accessories or both also plays a part in carriers' strategies. Aftermarket products are nice because they are less expensive both for the carrier and the end-user, and there are a lot of aftermarket vendors out there with a wide range of quality, Herring said. However, you have to be careful which ones you choose to work with, he warned.

"If a phone is messed up with an aftermarket accessory, the phone vendor won't honor the warranty," Herring said. "And they have a right to say that because there are some aftermarket products in which the circuitry is not correct, and it will mess up the phone."

AirTouch hasn't had much luck with aftermarket products, which have a higher rate of return.

"Customers here would rather pay a few more dollars for the OEM," May said, "so we end up using mostly OEM products in our stores."

But that doesn't keep the vendors from trying. May said that they get samples every week from aftermarket vendors, which are turned over to the quality assurance lab where they are tested. If they seem viable, then a full evaluation is given, and if the product meets AirTouch's standards, the product is sent on to the packaging department, and the product is made available.

"It's pretty rare because of the quality standards involved," May said, "but we do evaluate those products that appear to be viable for our customers."

Herring also continually receives samples from many vendors. He said that Cellular South is in the process of narrowing down the number of aftermarket vendors it deals with. The plan is to work with one OEM and one aftermarket vendor. He said it also is going to standardize the stores.

"Right now we buy from six or seven vendors, and one store may buy from ABC Company and the next store, XYZ Company," Herring said. "We are trying to get it to where if the customer goes to different areas, the stores will look the same."

Although the dynamics of marketing accessories may be changing with the increase in aftermarket vendors, additional sales channels and more types of customers to satisfy, the importance of marketing accessories is holding steady. Accessories still play a large role in bringing in revenue, and with a little nurturing, this revenue stream will not dry up.

Out With the Old ...

If a consumer has an old cellular phone and is trying to find accessories, the path of least resistance may be to upgrade. Sixteen attempts to locate a replacement battery for an NEC P-120 in the Kansas City area gave rise to a variety of responses. Two said they carried only the 800 series; six said they didn't have the battery. Three said the battery was back-ordered, and they didn't know when it would be in; and five said they had the battery.

Calls to two large office supply stores revealed that they do not carry NEC products.

According to Lisa Bowersock, director of public relations for the former US West New Vector markets, now part of AirTouch, there isn't really much of a market for old accessories anyway.

She said the people who would have an old phone tend to be the early adopters who usually want the latest technology, so although they may have an old phone in the closet, they would have upgraded.

"Those that are adopting wireless today, the late adopters or the general consumer market, have typically bought their phone in the last three to five years," she said, "and those are the most common models."

Motorola to Form Accessory Business

Motorola is forming an accessory business organization that will be responsible for product development and sale of accessories and batteries for a wide range of subscriber units, including those from other manufacturers. The new organization will work with Motorola's distribution channels and network of resellers to expand aftermarket opportunities.

The Accessory and Aftermarket Division will manufacture and market Motorola and MAG ONE brand aftermarket products. These will include accessories and batteries for Motorola cellular phones, iDEN digital wireless products and paging products. Other MAG ONE products include batteries and antennas for many non-Motorola-brand cellular phones.