Wireless - The NPD Group

Home » Bulletin

There's No End in Sight for Handset Branding Battle

In the wireless industry, there has always been an ongoing struggle between carriers and original equipment manufacturers (OEMs) about who “owns” the customer. This battle extends to the mobile phones that carriers sell, and takes the form of a clash over whose logo appears on handsets.

Clearly carriers and OEMs both want their respective brand names prominently displayed on mobile devices. In the past few years, handset manufacturers made some progress toward co-branding their handsets; however, recently carriers have gone back to focusing on their own brand – leaving some handset manufacturers’ logos off the devices altogether.

In September, NPD added several carrier-branded models to the list of handsets tracked by our monthly Mobile Phone Track service. In the first month, more than five percent of devices sold were carrier-branded, and the total units sold were in excess of 700,000. On average, the price for carrier-branded devices ($79) was higher than the industry average ($60).

Carrier branding of handsets used to be found only among larger carriers like Cingular, Verizon Wireless, Sprint Nextel, and T-Mobile. Lately, though, some smaller carriers and MVNOs have also begun moving in this direction. For example Virgin Mobile brands phones solely with its own logo and also markets them under its own descriptive names.

Does this carrier branding mean that the operator is bullying the OEM? In some cases the answer is “yes”; however, in other instances, the smaller OEM may actually benefit from allowing carrier branding of its devices. These benefits accrue more readily to smaller brands, or those that have exclusive relationships with the carrier. For example, Sanyo sells its handsets almost exclusively to Sprint Nextel, and Sprint Nextel has been co-branding these handsets for many years.

In terms of other unique relationships, Sharp bows to the T-Mobile brand on all of its Sidekick devices. This is also the case with Kyocera devices sold through Virgin Mobile.

Other handset manufacturers benefit to some extent by using the carrier’s brand on their devices instead of their own, especially if it’s a foreign company that’s new or unknown to U.S. consumers, such as Pantech and HTC. In these instances the carrier brand is stronger than the OEM name; thus the carrier brand lends credibility, and may attract buyers who otherwise would not have purchased a device from a company they are not familiar with.

So will carriers win the battle to brand devices under their own logos in all cases? Not likely. Companies such as Motorola, Nokia and Sony Ericsson know their brand names are strong and resonate strongly with consumers. They believe their brand benefits the carrier, and they work hard to have their logo included on every device they sell. It’s clear that carriers and OEMs will continue to wrestle for branding dominance for some time to come.

– Charul Vyas, Senior Wireless Specialist