Assessing the impact of the huge cyber-attack on Carphone Warehouse
A jolt to the system
Things had been going so well at Dixons Carphone, the brand was celebrating its first year in business as a joint entity. Its new the Connected World Services Division had a big American deal to shout about. It just goes to show that no matter how well it seems to be going, an event can come from leftfield and disrupt everything. Dixons Carphone’s market position won’t be effected fundamentally by this attack, but it will impact on stock and commercials. Reputation is also likely to be hit although the extent of this is difficult to measure. The Connected World Services Division will probably be hit the hardest because selling a consultancy service after a service division suffers a security breach is pretty difficult.
Bad for one, bad for all
This attack is bad for the whole industry, it will reduce trust across the board because by its nature Carphone touches a wide-range of operators and manufacturers. Many in the industry also feel the retailer can play a big in the development of the ‘Internet of Things’ market, all of whom will be disappointed. There are no competitors of the same scale as Dixons Carphone, but even if Phones 4u were still around they would be unlikely to be celebrating, security breaches effect trust in whole industries not isolated companies.
A matter of time
Unfortunately it is the nature of the digital global economy that cyber-attacks are attempted and that some of them succeed. The mobile industry is no different from other sectors where a major online presence has made them vulnerable to attack. The breach of Carphone Warehouses security systems is a warning that even the largest, most expensive systems can be exposed. It’s a reminder too that whilst the cost of running online operations is less, there are other downsides to the growth of the online domain.