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 towards promoting more strengthen services and products to wireless community operators and outlets that outsource such duties as the design, manufacturing, shipping, warehousing, repair, repurchase and refurbishment of mobile phones. the corporate also goals to diversify geographically by way of increasing outdoor Latin the usa, its largest local marketplace.
“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 denims and a white dress shirt, Bolivian-born Claure said in an interview at Brightstar’s headquarters close to Florida’s Turnpike that he expects the corporate to drive to a new peak in annual earnings this yr. He said the expansion catalysts will come with new enhance-service contracts with community operators and wireless handset outlets and a brand new distribution care for 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 greatest providers of wi-fi telephones were producers Nokia, Samsung and analysis in movement, the maker of BlackBerry handsets. Brightstar does a few mobile-telephone manufacturing on the facet at its personal 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.
Brightstar has been riding the explosive global growth of the mobile phone market, especially in Latin America, and now ranks among the largest privately held companies in Florida. It generated $5.7 billion of revenue last year with a work force of 4,000-plus employees serving customers in more than 75 countries.
Brightstar ranked 70th on Forbes magazine’s 2011 list of the 212 largest privately companies in America, those with at least $2 billion in annual sales. The only Florida companies that ranked higher on the national list were Miami-based distributor Southern Wine & Spirits (30th), Deerfield Beach-based Toyota distributor JM Family Enterprises (27th) and Lakeland-based Publix Super Markets (7th).
Brightstar apparently will remain privately held for a while. The company has stopped planning an initial public offering of stock. In late April, Brightstar withdrew a registration statement for the planned IPO that it had filed with the U.S. Securities and Exchange Commission about a year earlier.
Facebook, Groupon and other newly public technology stocks have been trading below their IPO prices, indicating that “this is a pretty unstable market to go public,” Claure said. “This company will be worth a lot more in the future . . . We have ample capital to grow.”
Brightstar rang up $5.7 billion of income closing 12 months, 24 percent greater than the 12 months ahead of. the corporate’s money profit (earnings before passion, taxes and non-money fees) zoomed to $19five.7 million ultimate 12 months, up forty six percent from 2010.
Claure said “2011 was a record year in terms of revenue and profits. We hit all of our numbers, so it was a very positive year for us,” and this year, “we expect to have another record year.”
But it won’t be as easy. Brightstar faces risks that include tough competition in its core distribution business, which produces profit margins that are razor thin, and geographic over-dependence on Latin America, which long has accounted for the majority of the company’s revenue.
One competitive predicament, as an example, is Indianapolis-based BrightPoint Corp., a in a similar way named rival with greater than $5 billion in annual earnings, which could become extra contentious in Latin the united states under new ownership. BrightPoint just lately agreed to be received through Ingram Micro, a global chief in technology distribution that amassed $36 billion of earnings ultimate year. Santa Ana, California-primarily based Ingram Micro expects to finish the purchase, worth $840 million, ahead of the top of the year.
BrightPoint, founded in 1989, has generated little revenue in Latin america but would possibly generate more as a result of Ingram Micro has a bigger distrihoweverion community within the area.
But Miami-based Brightstar is no pushover. Consider research by two analysts with credit rating agency Moody’s Investors Service, Gregory A. Fraser and Robert Jankowitz in New York City. They reported in June that Brightstar’s market position was solid and its credit outlook stable.
“Brightstar maintains a strong leadership position in Latin America, a number one position in North America, where it competes against BrightPoint, and a solid presence in Europe,” Fraser and Jankowitz said in their June 11 report. “Though Asia-Pacific represents a small share of Brightstar’s revenue, it is the fastest growing region . . . and its contribution to the company’s gross profit is higher than the other regions.”
The Moody’s analysts reported that economic turmoil in Europe stemming from financially impaired banks and governments is a threat to revenue growth at Brightstar, but over the near term, “we expect Latin America and Asia-Pacific to remain more resilient to spillover effects from the Euro-zone debt crisis, relative to developed economies.”
Brightstar’s most sensible govt mentioned international demand for mobile phones and different wireless devices has been remarkably unfazed by means of popular worries about financial institution solvency and monetary soundness in Europe.
“We’re lucky to be in an industry where crisis doesn’t really matter,” Claure said. “Apple is still selling phones in Greece. Apple is still selling phones in Spain . . . People would rather have the latest cell phone than many other necessities. It’s the way we live our lives.”