The Sun Sets on Smartphone Exclusivity

by Matt Klassen on January 9, 2013

The days of exclusivity are coming to an end in the smartphone market, that is according to Sprint’s product chief Fared Adib and device executive Ryan Sullivan, who explain that the mobile industry is moving away from carriers locking up exclusive phone distribution rights. Ideally this would mean that soon any phone you want will be available on any carrier you want. But why the change in strategy? Simply put, mobile technology is advancing too quickly.

It wasn’t that long ago that wireless carriers and mobile manufacturers alike worked on a clockwork release schedule, with carriers able to secure exclusive rights to certain key smartphone brands, knowing that they had at least a year to market these phones and attract new customers. AT&T’s deal with Apple to distribute the iPhone is the most famous example, the exclusivity contract helping drive new customers to Ma Bell to get their hands on the newest must-have phone.

While exclusivity remained the prevailing mobile strategy for several years, it looks like the end has come for such arrangements, as new smartphone pioneers like Samsung have shown that success can be had through widespread market saturation.

For years Apple was the unquestioned leader of the smartphone market, demonstrating to the mobile market that if you have the right device that you can dictate terms to wireless carriers, instead of the other way around. But the birth of Android and the subsequent market dominance of Samsung using Google’s open source platform has shown us another way, and Apple has been forced to follow.

While I’m sure the Cupertino Company would like to continue dictating who can distribute the iPhone and who can’t, the truth of the matter is that Apple’s competitors are developing new technology so quickly that exclusivity simply no longer makes sense.

To wit, by releasing new smartphones several times a year and making them as broadly available as possible, Samsung (most notably although not exclusively) has found Apple’s Achilles Heel, its annual release schedule, and has exploited that through bringing technological upgrades to the market faster than its Cupertino competitor. Not to be outdone, we’ve seen Apple attempt to respond to this new trend by releasing several of its products in a calendar year, a new strategy that now threatens to destroy all the hype surrounding Apple’s product line.

That said, while the days of smartphone exclusivity are coming to an end, they’re not over yet, as each carrier still holds on to several unique smartphone lineups. It’s unlikely we’ll see Verizon drop its Droid franchise anytime soon, or AT&T with its Lumia lineup, or even Sprint with its own exclusive EVO brand, but certainly gone are the days where a world class super phone is confined to one carrier.

Much like Apple dictating terms to carriers regarding the iPhone, its interesting to see how Samsung, in its own way, has been able to dictate exactly the opposite, forcing carriers with its wide release strategy to fine new ways to attract and keep customers. To that end, the focus for carriers has moved away from products—seeing that every carrier’s catalogue is now virtually the same—to new services that set them apart from their competitors.

While I’m sure such a change is frustrating for carriers and perhaps for some smartphone manufacturers as well, I can tell you one thing, forcing carriers to improve their services in order to attract customers will only benefit you and me, as this shift will ultimately serve up a better mobile product.

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Written by: Matt Klassen. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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