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Retailers See Benefits In Handset Exclusives

New York – Retailers
generally embrace exclusive handset contracts between carriers and vendors, but
not always.

“Overall, it’s a
good thing,” said the president of a multimarket master agent. “Wireless
becomes a commodity at some point, and you need something distinctive. For
Verizon dealers, “there’s an advantage to selling some phones that are unique
to Verizon. If every retailer had every phone, you couldn’t sell
distinctiveness. The retail sales force needs to sell something unique.”

Retailers also
benefit from the greater marketing spends by carriers and vendors to support
the launch of an exclusive handset, he said. Because all four national carriers
offer exclusives, even single-carrier retailers get a chance to offer something
different, he noted.

But there are
exceptions. In some cases, carriers offer select phones only through their own
stores. In other cases, carriers open up distribution of exclusive phones only
to select indirect retailers, as is the case with the iPhone.

Initially, Apple’s iPhone
was available only through Apple stores and AT&T-owned stores. Later,
distribution was opened up to Best Buy and Walmart, which could leverage the
benefits of the promotional efforts by AT&T and Apple. But RadioShack, an
AT&T Wireless dealer, and other retailers have not been allowed to sell the

Best Buy was able to
leverage its status as Apple’s largest customer to win iPhone distribution, one
marketer said.

For its part, Sprint
launched the Palm Pre through its own stores, Best Buy and RadioShack stores,
and some Walmart stores. Verizon, on the other hand, launched the BlackBerry Storm
though all its channels.

A Federal Communications
Commission (FCC) ban on exclusive handset contracts between carriers and
vendors, marketers noted, doesn’t guarantee that a carrier’s exclusive handsets
will be available to all retailers in a carrier’s distribution channels. “Handset
vendors or carriers still control distribution,” the master agent said.