In our technology-driven society, owning a smartphone is customary, and getting one is effortless.

The plethora of Sprint, AT&T, and Verizon Wireless retail stores in the United States dedicated specifically to cell phone services make it difficult for electronic chain companies to compete, especially in today’s deplorable economy.

Radio Shack Corporation, in particular, revealed on Feb. 21, that it is struggling, as profit plunged 79 percent during the fourth quarter of 2011 for several reasons.

Operating income also drastically decreased to $30.5 million during the fourth quarter of 2011 compared to $96.9 million during the fourth quarter of 2010.

Radio Shack Chief Executive Officer Jim Gooch foresees more difficulties in the first quarter of 2012, but assures growth in the future as Radio Shack’s phone business develops.

“The expansion of iPhone into three carriers combined with the launch of iPhone 4S resulted in a dramatic increase in the mix of iPhone sales,” said Gooch during an investor conference call on the fourth quarter report. “This helped to drive our positive comp store sales but negatively impacted our margin mix.”

In other words, the 10-K illustrated that although Radio Shack sold more phones in the fourth quarter of 2011 than in 2010, they did not make as much profit on them.

It is unlikely for profit to increase in 2012, so Radio Shack must make necessary image changes so that consumers begin to associate the company with smartphones and tablets.

Smartphones are now replacing most other products. In fact, the Consumer Electronics Associate anticipates that smartphone unit sales will increase 24 percent in 2012 to 108.8 million units, with total revenue surpassing $33 billion.

Additionally, CEA expects audio products, DVD players, and other commoditized items to experience price declines and reduced margins in 2012.

This is why Radio Shack has chosen to primarily focus on enhancing its mobile device segment.

Lindsay Merrill, a financial analyst for Unitrin Specialty says that Radio Shack has to shift its strategy in a major way to improve their results for 2012.

“It appears that management is practically depending on the future success of the mobility business to compensate for its low margins this year,” says Merrill.

“The financial results of 2011 show that the cost of those products sold is far too high to achieve profitability, especially for an electronic chain retailer that bases its clientele on private label products, rather than cell phone devices.”

Revenue for the fourth quarter did go up 5.9 percent year over year to $1.39 billion, due to smartphones and other products from AT&T, Verizon, and Sprint.

However, this took away from the company’s signature business segment-digital cameras, MP3 music players, and other electronic accessories-where revenue fell 30 percent in the final quarter.

It is not just the numbers that indicate the need for a change in Radio’s Shack business plan.

“I had no idea that Radio Shack sold cell phones, and neither do any of my friends,” says Sprint customer Jenna Yoder. “The only reason I found out is because I drive by Radio Shack on my way to work and saw ads in the window.”

In the middle of the day, Yoder is the sole customer inside Radio Shack’s East Mockingbird location, where she purchases a brand new iPhone 4 for Sprint in just 10 minutes.

“This is the fastest, easiest process I’ve ever had with getting a new cell phone,” says Yoder. “I just think Radio Shack is targeting the wrong audience, people are always going to head to a Sprint or AT&T store first.”

Even the store manager, Cameron Brown, admits that consumers do not think of Radio Shack as a cell phone retailer.

“I think it will just take time for consumers to acknowledge Radio Shack as more than just a place to buy headphones and batteries,” says Brown.

Mobility sales are more than 50 percent of Radio Shack’s business, and it is apparent that the company needs to work on its marketing and advertising to convince customers that it’s a competitive smartphone retailer.

At the 2012 International Consumer Electronics Show, the CEA forecasted the industry to grow 3.7 percent in 2012 to reach record-high revenues of $200 billion in the United States, with smartphones as the main driver of that growth.

Clearly, Radio Shack is on the right track.