Dial up Dixons Carphone

Smart technology has advanced at an extraordinary pace in recent years, driven by the advent of smartphones and tablets. These handheld devices have changed the way we view the world and interact with our surroundings. That, in turn, has led to the 'internet of things', a tech term used to describe a scenario in which computers are embedded in all sorts of devices and linked to the internet: heart monitoring implants, cars with built-in sensors, fridges and thermostats controlled remotely from smartphones, connected lighting, wearable technology and more. So, as electronics and mobile phone connectivity converge, Dixons and Carphone have teamed up to offer customers a one-stop shop for all their connected world needs. Carphone is one of Europe's largest independent retailers of mobile phones, which are central to how this technology will operate and be controlled, while Dixons, one of Europe's largest purveyors of electrical goods, sells many of the devices that make up the internet of things.

Already, this dream team is making good progress. In the first six months, like-for-like sales across the group rose 5 per cent, including a 9 per cent rise in the second quarter - that far outpaced the performance of any other high-street retailer over the same period. Underlying pre-tax profit was up by nearly a third to £78m. Christmas has been generous, too, with the group enjoying its best Black Friday ever, according to chief executive Sebastian James. It also disposed of its Virgin Mobile France business - a legacy of Carphone Warehouse - for 104m in cash, alongside the struggling Turkish and eastern European operations, originally part of Dixons. The collapse of Phones4U in the UK - Carphone's only real rival - has opened up further market opportunities: there are now 190 Carphone Warehouse stores operating within branches of Currys and PC World. This is the only such model in the high street and a useful outlet from which big network operators can sell their services to consumers. Finally, the merger will lead to cost savings of at least £80m by 2016-17 - one year earlier than planned.

There are still a few hurdles to jump. The German and Dutch businesses are under review and, while the southern European businesses are showing signs of improvement, Greece is still lossmaking and huge economic and political uncertainty remain in the floundering eurozone. That said, Dixons Carphone is branching out into the world of business-to-business. 'Connected World Services', a new division that reported £4m of profit in the first half, leverages the group's expertise, operating processes and technology to provide a range of services. Already, it has signed a contract with BT to offer technical support as it makes changes to its corporate mobile network operations. And a major global brand in the UK will soon be using Dixons Carphone's honeyBee platform in-store. The platform allows customers to connect to wifi through their mobile phones. For each connection, CWS receives a fee. HoneyBee is already being used by companies including Samsung, Aviva and RBS.