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Do network-exclusive smartphone deals limit sales?

Do network-exclusive smartphone deals limit sales?

Mobile phone carriers are always on the lookout for new customers, whether this is through keenly priced tariffs or their range of handsets.

Almost without exception those are really the only two avenues a network can use. But there is another way: exclusive mobile phones, which can solely be obtained through a single network.

Exclusivity usually falls into two camps: a limited period of time, a month is the norm, or outright exclusivity for the handset’s entire shelf life.

Benefits of exclusivity?

The benefit of exclusivity on a sought-after phone is two-fold. Naturally, it offers scope to attract new customers to the network. But it also acts as a reward for existing customers who are looking to upgrade to the latest and greatest device.

Take, for example, the Nokia Lumia 920 and Google Nexus 4.

Nokia Lumia 920

Nokia’s 920 is exclusive to EE and is available on the 4G network of the same name. This is along with being available with its partner networks Orange and T-Mobile.

The Lumia 920 can only be obtained on a contract through EE and is expected to stay that way until the end of the year. And there is already moves underway to refresh the deal and extend it in 2013.

This flagship 4.5-inch screen, dual-core 1.5GHz processor, Windows Phone 8-powered device arrives in a very short period between similar models.

Making it exclusive to that company might mean it’s been subsidised by EE, where Nokia knew it wouldn’t get great sales figures in the open market.

LG Nexus 4

lg nexus 4 official

LG’s Nexus 4 is on sale solely from O2 for its first month of availability in a carrier-exclusive deal. It was also available directly from the Google Play store, and reportedly sold out within just half an hour.

O2 is likely to have anticipated this. Therefore snaring exclusive rights to the handset was a wise idea, as it could only be obtained through them.

Existing Customers

Another possible motive for a network to only carry a particular phone is customer retention.

With a phone as popular as the Nexus 4, a customer coming to the end of their contract might hang on knowing that a much anticipated handset is around the corner.

This could buy that carrier an extra month of customer retention, which it might not expect these days – as mobile phones, contracts and their features are a buyer’s market.

Publicity money can’t buy

breaking news generic (small)

Lastly, carrier-exclusive deals could just fuel anticipation for the mobile phone and gain the sort of publicity and marketing push that a manufacturer could normally dream of.

This alone could be a worthwhile exercise for a mobile phone manufacturer to consider, even if it takes a hit in lost revenue for a month or so. Whether this hampers or encourages sales, only time will tell.

Rob Kerr is a contributing editor to our sister mobile phone comparison site Omio. You can read more of his thoughts on network-exclusive smartphone deals here.

Category: News
Tagged: industry news
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