Exclusivity is Not the Answer

Posted Oct 06, 2012 at 3:21 am in Threads > Opinions

At one point in time, there was a need for exclusivity and it helped manufacturers and carriers differentiate themselves from the pack and also was a way to promote their services and brands. For example, the Droid series by Verizon was one such exclusive set of Android smartphones and at the time it was practical for Verizon to be able to market the Droid series and have their devices recognized in a sea of other Android smartphones. It was a way of differentiating their phones from those that were carried by the likes of AT&T, Sprint, T-Mobile, and others. The Droid series worked to Verizon’s advantage and brought them new customers and retained old customers because they were the only carrier that had those phones and people wanted them. Each carrier had their own set of exclusive devices and not a much larger degree, this was a way of battling the iPhone and other top-tier smartphones.

A second example is the Evo series from Sprint. Sprint introduced the HTC Evo 4G as their flagship and it hailed in a new era in terms of a new 4G network and a large 4.3 inch screen that made it stand out from the rest of the pack of Android smartphones as well as the iPhone that was still relegated to AT&T. Sprint touted their Evo device as the first of it’s kind with 4G and they showcased it for the world to see through many elaborate advertisements and it eventually paid off handsomely, with Evo becoming their best selling device ever and this in turn made HTC’s brand more recognizable and brought them much success. Soon, you has a solid partnership forming between the two, whereby, flagships and certain mid-level HTC devices would be sent Sprint’s way. AT&T at the time had an exclusive contract with Apple to carry the iPhone and the same thing was happening over there. T-Mobile had it’s own set of devices that were exclusive to it and though they did not have the same recognition as the Evo or Droid series, they still were framed by the same principles of differentiation and being the only carrier to have a particular device.

Another aspect of this exclusivity was that manufacturers were being paid for make certain devices exclusive and they were heavily promoted and marketed by their exclusive carriers. This lead to great partnerships forming among carriers and manufacturers, whereby, one flagship devices from one manufacturer would go to one carrier and another flagship from a different manufacturer went to another carrier. This was the way things were and it seemed to work for everyone except for the consumers, who were being forced to decided to change carriers for better or worse in order to use a flagship device that was not being carried by the existing carrier.

This leads me to the heart of my little spiel and that is the end of exclusivity or at least manufacturers finding/needing to find out that it is to their benefit to have their flagship devices on as many carriers as possible. This began, I would say with the Samsung Galaxy S, which was presented to Sprint, T-Mobile, Verizon, AT&T, and US Cellular as the Epic, Vibrant, Fascinate, Captivate, and Mesmerize, respectively. What Samsung had found was, the holy grail, a way of bringing their flagship to as many people as they could and still managing to differentiate the Galaxy S with respect to the carriers. Samsung did a great job marketing their Galaxy S and showcasing their flagship as being the best and people believed it and bought it and the Galaxy S soon became a household name and Samsung’s brand recognition and customer base increased substantially. Then came the arrival of the Galaxy SII and this cemented Samsung as the top smartphone manufacturer and their brand recognition went through the roof. Clearly, Samsung was doing something right and they were being reward for it, handsomely.

Samsung’s ability to provide their flagship to all the top carriers made them stand out and instead of customers having to change carriers or wait months and months for their carrier to get something worthy of being called a flagship, they could now get the best phone on their carrier. The evidence of Samsung’s success is pretty clearly, they have sold over 25 million Galaxy S’s, 30 million+ Galaxy S II’s, and are now selling one of the hottest and best smartphones, in the Galaxy S III. Also, what distinguishes Samsung now, is that they are able to provide their flagship to all carriers without having to change it’s design or specs. One flagship to rule them all.

Personally, I am a big HTC fan and have been for a long time but I am getting annoyed and irritated by their strategy because I want them to succeed as much as Samsung and I know that they can. However, their problem lies in the fact that currently, their flagship, the One X is exclusively on AT&T and the just announced One X+ is also an AT&T exclusive. I know they are probably getting a lot of money from AT&T but I don’t see how that could possibly be better than all the customers they could be getting if they had place the One X or One X+ on all carriers like Samsung. I think that in this day and age, it is imperative that manufacturers like HTC, Motorola, LG, and others, learn from Samsung and even Apple and what they have done with their flagship. There is so much opportunity for growth and expansion within the North American markets and worldwide, if only they learned that exclusive flagships are a disadvantage that could pose and is posing big problems on these OEMs. Success comes when consumers are happy and continue to buy OEM’s smartphone because they like the brand and what it has to offer.

Samsung has found the formula that is giving them great success and they are
utilizing it to their advantage, while the rest of the Android OEMS are sitting in meetings and conferences trying to figure it out. This should be a big red flag for HTC, Motorola, LG, and others. If you want to continue to succeed then it is imperative, that you stop signing exclusive contracts with carriers and be independent and do what is best for your company and most importantly, what is in the best interest of the consumers because without us supporting you, you will ceases to exist. This should be a learning moment so take advantage of it and change for the better.