Wireless operators are playing the retail field, selling some high-end phones exclusively through nontraditional channels. And the nation’s largest big-box retailer is becoming a first-stop shop. Verizon Wireless quietly launched a high-end Samsung handset exclusively through Best Buy late last month, snubbing its company-owned locations and Circuit City, even though Circuit City only sells Verizon Wireless service. The Samsung A970 device includes access to Verizon Wireless’ CDMA2000 1x EV-DO network and corresponding Vcast service and a 2-megapixel digital camera, which offers the U.S. market’s first 2x optical zoom lens. The handset is priced at $500, but actually sells for $300 after $200 in rebates.
Verizon Wireless spokeswoman Brenda Raney noted the exclusive release through Best Buy fit in with the retailer’s traditionally high-end and tech-savvy consumer base. Best Buy is the largest consumer-electronics retailer in the country with more than $24 billion in sales last year.
Sprint Nextel Corp. announced a similar exclusive handset arrangement earlier this year with Best Buy when it launched the Samsung A800. That device was the carrier’s first 2-megapixel camera phone and retailed for $350 after $150 in rebates.
Verizon Wireless supplanted T-Mobile USA Inc. from Circuit City’s 570-plus retail locations last year. The deal called for Verizon Wireless to manage, operate and staff so-called stores-within-a-store at Circuit City locations. Verizon Wireless also operates more than 1,200 company-owned retail locations.
Raney downplayed the significance of providing Best Buy with the first crack at selling the new Samsung device, noting the exclusivity was only for a short period of time and that all of its retail partners would have access to the device this week.
Verizon Wireless is not the only operator playing musical retailers. Cingular Wireless L.L.C. announced earlier this year that it signed a 10-year agreement with RadioShack Corp. to replace Verizon Wireless in RadioShack’s more than 5,000 retail locations across the country beginning next year.
Sprint Nextel also extended its retail arrangement with RadioShack to include Sprint Nextel’s iDEN products and services.
In addition to securing an exclusive handset from Verizon Wireless, Best Buy also managed to nail down the first major retail expansion for Craig McCaw’s Clearwire Corp. wireless broadband service. Best Buy counts more than 400 retail locations in 41 states, though the Clearwire service is expected to be limited to Best Buy locations in the 21 markets where Clearwire offers service. Those markets are in parts of Texas, Washington, Florida, Oregon, California, Minnesota, Idaho and Wisconsin, with plans to expand into Alaska, Hawaii and Nevada.
The Clearwire service uses a pre-WiMAX technology from NextNet Wireless, with prices ranging from $30 to $50 per month for unlimited access with speeds of between 786 kilobits per second and 1.5 megabits per second on the downlink and 256 kbps on the uplink.
Best Buy will sell Clearwire’s plug-and-play wireless modem, which the company said consumers could install themselves.
“Our relationship with Clearwire takes our assortment of high-speed Internet offerings to a whole new level by providing customers with a broadband wireless solution they can use as soon as they get home from our store,” said Wendy Fritz, vice president of subscription services at Best Buy. RCR
