RadioShack's wireless woes

RadioShack continues to face challenges with its wireless sales. Although the firm yesterday reported first-quarter profits that doubled Wall Street expectations, these results were because of cost-cutting measures.

The chain continues to have problems with its wireless sales. Much of the firm's troubles stem from a 15-month struggle to transition from selling Verizon Wireless to selling AT&T. That transition caused a 25 percent decline in wireless handset sales, the retailer says. A big part of the problem is that RadioShack stores compete with nearby AT&T direct-to-customers stores. These stores initially were located near RadioShack stores so they could compete against Verizon. When RadioShack made the switch from Verizon to AT&T, that strategy has provided some uncomfortable overlap. Plus the firm has more competition from big box retailers such as Best Buy and CompUSA that have finally embraced wireless.

It wasn't so long ago that RadioShack was the darling of wireless retail. Back in 2001-2004, the firm was known for its ability to help customers sort through the various wireless offerings and provide answers to tricky technical questions that often stumped other wireless retail help. But now that consumers are more wireless-savvy, it appears that expertise is no longer as valuable.

For more on Radioshack's Q1:
- see this Forbes article