Retailers See Benefits In Handset Exclusives - Twice

Retailers See Benefits In Handset Exclusives

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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 iPhone.

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.

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