The future of RadioShack

The other day I needed to kill some time, so I went into a RadioShack. The RadioShack of my memory sold transistors, switches and radios; the new RadioShack sells cell phones, iPods and satellite radios.
I often wonder how RadioShack stays in business, with so few customers and such high prices. The only thing I can come up with is they have a set of customers who shopped the RadioShack I remember, and still go there for their tech needs.
This is a market segment that Circuit City and Bestbuy have trouble addressing with their massive and intimidating stores. It could be a highly synergistic move for one of those two giants to partner with RadioShack (or if the price was right buy them out) and create smaller “Essentials” type stores under the RadioShack brand (TV’s, cell phones, etc) in areas where the demographic indicates they would be appropriate. In areas with higher income and/or a younger demographic where the RadioShack brand carries less weight rebrand the locations into BestBuy Expo or the like stores. These stores would compete against Sony Style stores, and would have cutting edge stuff but have minimal inventory on the big ticket items. The small stores would rely on the warehouse type stores for inventory, or use the mail to fulfill orders making them catalog stores. People don’t carry plasma TVs around in the mall, so this could work.
RadioShack has some prime locations for both types’ stores, and some kind of partnership, and rebranding could breathe fresh life in the company. My concern would be that the big box retailer partner could not support the addition of that many new stores all at once. A lot of market research and logistics modeling would need to be done to determine if the model would be workable for both parties.

The flip-side would be Walmart or Target partnering with RadioShack to address the market segment, with instant access to the brand recognition, and locations. Again I see serious issues with such a large scale expansion. The solution to the problem could come through selective partnering with RadioShack. This would allow Walmart or Target to offer their massive purchasing power to RadioShack, in exchange for gaining the ability to sell electronics, and accessories in neighborhoods that would block their traditional entry. Sneaky, but it could work.