The Carrier, the Phone Maker & the Customer

cheapvodafone.jpgWho owns the loyalty of the wireless customer, the carrier or the handset maker? As Vodafone launches branded handsets, handset makers open stores, and the iPhone changes the game, increasingly the two sides that together control the mobile industry, are starting to push at the edges of their integral and formerly defined relationships.

The WSJ points out some early success for Vodafone’s own branded handsets, which launched in Europe last year and have now sold 750,000 in that market. Vodafone launched other low cost branded handsets in Africa this week. Nokia and Motorola can’t be too thrilled by the competition from the world’s largest carrier by revenue.

Vodafone already owns the mobile lifespan of the customer, has a valuable retail presence, and can undercut the cell phone maker’s prices — as little as $25 in some markets. Moto for one doesn’t need any more competition on cheap handsets.

And especially when Vodafone is eager to paint itself as a threat in the press:

“Our main intention is to stir up the market,” says Jens Schulte-Bockum, head of Vodafone’s handset strategy. — WSJ

An interesting aspect will be if Vodafone can attract customers with other features for its branded phones, not just rock bottom prices. The company is working on a more design-focused model with Sagem. I don’t buy Safeway’s generic food line, but I do buy Safeway’s Organic line. The bottom of a higher-end, targeted line can be a valuable niche.

Motorola and Nokia are sensing the shift and have been opening up retail outlets in integral markets looking to win over brand loyalty with a hands-on experience. Motorola went to Shanghai, Nokia in the U.S. and Samsung to NYC.

Then there’s Apple and the iPhone, which has basically taken the branding out of the hands of both sides of the traditional mobile equation. From the sound of it Cingular isn’t really even getting that good of a cut, just access to the hottest phone of the summer (for 5 years according to USA Today), and Motorola and Nokia are both struggling to roll out iPhone killers.