End the iPhone exclusivity

Analyst Opinion – I live in the Great White North, which typically means I can buy new technology six months after it is first released in the U.S. I’ll also pay more for the privilege thanks to a weak Canadian dollar. But since I’m Canadian, I’ll still be polite about it. For once in my life, however, being Canadian may work to my advantage. If the Web rumor mill can be believed, Canada may end up being the first country on the planet where iPhones are sold through more than one carrier.

These days, Canadians have only one choice if they want an iPhone: Rogers. Like AT&T in the U.S., Rogers signed an exclusivity deal with Apple. Also like AT&T, this deal is cloaked in secrecy. No one knows with absolute certainty how long it’ll be before other carriers get in on the iPhone action. So for now, anyone who wants an iPhone can only get it from one carrier.

Is this a monopoly? Not necessarily, since competing carriers would be more than happy to sell you plenty of other perfectly serviceable smartphones. But if you’ve got your heart set on an iPhone on either side of the border, you’re out of luck. If you’re already with another carrier, you’ll either wait out your contract before buying in, or you’ll pay a termination fee for the privilege of switching carriers. Either way, not fun and not really consumer-friendly.

I can understand the appeal of exclusivity if you’re a carrier. Being the only game in town for the latest and greatest devices is how you differentiate yourself and create hype during the critical time leading up to and immediately following a new product release. What I fail to understand is how any of this benefits the handset vendor. Two years after the iPhone redefined the smartphone market, how is Apple still benefitting from being able to reach only a fraction of the potential mobile market? It’s stuck selling devices through one carrier, which limits its ability to grow market share.

Research In Motion sells a wide range of Blackberry-branded devices through multiple carriers in hundreds of countries around the world. While some devices are exclusive to certain carriers – and some carriers admittedly get stuck with older, less desirable designs – you can still get your Blackberry fix for a reasonable buy-in if you find yourself midway through a three-year contract. Apple’s one-device, one-carrier strategy forces customers to make a fairly black-and-white decision that may cost them dearly both up front and over the long haul.

If the rumors are to be believed, customers of competing Canadian carriers Bell and Telus will be able to score an iPhone before year’s end. If that happens, I’d be willing to bet the clock will be ticking on AT&T’s U.S. exclusivity as well. Increased competition in every mobile market can only benefit consumers. And Apple, as it fights to grow market share against RIM and increasingly aggressive Nokia, Palm and others, will need all the channels it can to maximize consumer adoption.

Carmi Levy is a Canadian technology analyst and journalist covered with scars from his years leading IT help desks and managing software development projects for big bad insurance companies. He comments extensively in a wide range of media, and works closely with clients to help them leverage technology and social media tools and processes to drive their business.