Locked up: Why AT&T racks up so many exclusive phones

The Lumia 1520 smartphone is the latest phone to get the exclusivity treatment from AT&T.

 

 

AT&T and Nokia have long enjoyed a close partnership, but at one New York event in July, their kinship led to a particularly awkward moment.
It was after Nokia had unveiled the Lumia 1020 and its 41-megapixel camera. AT&T Mobility CEO Ralph de la Vega had just walked off stage after extolling the virtues of the device and touting its exclusive partnership, and then-Nokia CEO Stephen Elop began fielding questions about the device. Which is when things got testy.
"AT&T has been a terrible partner for Lumia devices," said one audience member, clearly a fan of the direct approach. "So what have you done to make sure this terrific phone doesn't get the same crummy treatment from AT&T?"

AT&T's senior VP of devices, Jeff Bradley.

The question may have been inflammatory, and maybe even a little unfair, but it underscores the frustration and disdain that many customers have for exclusivity deals -- agreements between a handset vendor and a carrier that keeps a specific smartphone or tablet locked into one partner for a set period of time.
But the truth is, exclusivity deals are a necessary evil. While they irk consumers, they are lucrative for both carriers and handset vendors. Such agreements provide an incentive to the carrier to order more phones -- often at higher volumes than if the vendor shopped its phone around to all carriers. The deals also force the vendors to up their game with unique devices as they compete for limited exclusivity slots at each carrier.
"It actually helps consumers by bringing more devices to the market," said Roger Entner, an analyst at Recon Analytics. "There would be less competition if there wasn't exclusivity."
AT&T, more than any other US carrier, has shown a knack for snagging exclusive phones. The latest is Nokia's Lumia 1520, a jumbo-sized flagship phone and the follow-up to the previous AT&T-exclusive Lumia 1020. It's the continuation of a 2-year-old relationship, when AT&T became one of the first carriers to bet on Nokia in a big way. The Lumia 1520 goes on sale in AT&T stores on Friday.

The Lumia 1520 joins the long list of high-profile smartphones that AT&T has locked up over the last few months, a lineup that includes the rugged Samsung Galaxy S4 Active and phablet LG Optimus G Pro, as well as one phone AT&T would like to forget, the Facebook Home-powered HTC First. When Motorola unveiled its Moto X across a number of different US carriers, AT&T held the exclusive rights the Moto Maker customization option, which was the phone's signature feature. That exclusivity period lifted earlier this month after the launch in late August.