Exclusive Carrier Contracts Slow Smartphone Use in Business

News Analysis: Exclusivity in the cell phone industry is impeding the adoption of the latest smartphones in the enterprise. More companies might equip employees with updated smartphones, or at least subsidize the mobile devices if the devices were carrier-agnostic. This problem won't keep smartphones out of enterprises. But it's complicating efforts to support the most advanced models at reasonable cost.

The cell phone industry is an interesting space. It's highly competitive. It has all the features of a mature, yet growing market. And because it has so many products available, few phones are able to make a mark for longer than a few weeks (except, of course, for the iPhone).

But it's because of that that most carriers are now trying to find the best and brightest phones and forming exclusivity contracts with their manufacturers to capture a competitive advantage over other carriers. The Apple iPhone is exclusive to AT&T. The Palm Pre is exclusive to Sprint. The Android-based G1 is exclusive to T-Mobile. Each major carrier has at least one highly desirable phone totally under its control.
Consumers can simply get out of their contracts, move to another carrier and use the phone of their choice. It's quick and easy. But corporate contracts with vendors are entirely different. Carriers have marketing teams bringing long-term contracts to companies. The terms of the deals are different. The lengths of the contracts can vary. And for the most part, companies won't be willing to get out of that contract until it's time to do so. Because of that, most companies are locked in a contract with a single carrier, making only that carrier's phones available to employees.
That's a real problem. Although from a carrier's perspective it makes some sense to have exclusive phones, it hurts companies. It practically ensures that at any given time, the best phone for the job won't be available to employees. Granted, each carrier has its own set of smartphones that should be able to appeal to business customers, but at this point, it's a three-phone race between iPhone, BlackBerry and Windows Mobile products. And even then, it's debatable how appealing Windows Mobile devices really are in the enterprise.
Before the advent of the iPhone in 2007, this wasn't really a problem. Windows Mobile products were carrier-agnostic and Research In Motion's BlackBerry was available on every major carrier. An employee who needed a BlackBerry to get work done could have one regardless of the deal his or her employer set up with carriers. Furthermore, the iPhone wasn't enterprise-friendly. It was a consumer product with a couple of features that might appeal to enterprise employees. But it had no real appeal for the business world.
Today, all that has changed. Windows Mobile devices are becoming increasingly less desirable because they don't have the features of their main competition. They don't have the multitouch displays or the applications that appeal to users. Windows Mobile, despite a recent refresh, is looking like an outdated platform.

The BlackBerry is still a fine enterprise choice on any carrier, but the iPhone is now enterprise-friendly as well. It sports enterprise features like Exchange support and push e-mail, calendar, and contacts. It will allow for tethering. And thanks to an outstanding App Store complete with over 65,000 programs, it has the software needed to enhance the employee's experience. Today, there are thousands of applications designed specifically for workers who want to get the most out of their phones.
But since the iPhone is locked down to AT&T, only a fraction of the entire enterprise market can have one. Verizon Wireless or Sprint customers will need to try out an alternative, like the BlackBerry Storm or Palm Pre, respectively. Those devices try desperately to match the iPhone, but when it comes time to compare them with Apple's product, they don't stack up. They have far fewer applications, the software isn't as good and the experience for workers isn't improved by using them. They're simply not on par with the iPhone.

Don Reisinger

Don Reisinger

Don Reisinger is a longtime freelance contributor to several technology and business publications. Over his career, Don has written about everything from geek-friendly gadgetry to issues of privacy...