Soon after the breaking news of the iPhone 4 launch, another newsflash hit the blogosphere: for the first time ever, iPhone will be available for purchase through outlets other than AT&T and Apple’s websites and stores on launch day (this time, Walmart, RadioShack and BestBuy stores carried the device on the June 24th launch day).
While this is a big deal, it is also a part of a fairly recent and rapidly growing trend: availability of high-profile phones through non-carrier-affiliated channels at the launch date. In the online world the impact of this trend has been quite noticeable among online Agents (or third-party reseller websites as they are otherwise known).
Granted, wireless Agent sites like Wirefly.com and LetsTalk.com have been around for a while, but until a few months ago, most touted "latest-and-greatest" devices were not available for purchase on those sites until weeks (if not months) after the official launch (and even longer if you wanted to snag it at a discount). All this changed with the release of Verizon Wireless’s Motorola DROID.
In a departure from the status quo, Verizon made the DROID available through Agent sites (most notably Wirefly.com) at the same time as it became available through VerizonWireless.com. Moreover, it was being sold at a discount compared to the price on the carrier site ($199.99 on VerizonWireless.com vs. $129.99 on Wirefly.com).
Despite raised eyebrows and initial cannibalization concerns this approach seemed to work well for Verizon Wireless. With over 1 million devices sold over the first 70 days after launch the DROID become Verizon’s most successful smartphone in recent history. As for the cannibalization concerns, according to Compete research they seem to be rather unfounded; only about 8-9% of Big-4 online shoppers also shopped on Agent websites, suggesting that Agent shoppers and Big-4 carrier shoppers are, for the most part, two separate groups.
Furthermore, the interest generated by the DROID offer was large enough to help Verizon snatch interest share on the Agent sites from the competition (the interest in VZW’s products on Wirefly increased by 10% since the DROID’s launch).
So it is of little surprise that following the success of the DROID other carriers also started adopting the strategy for their phone releases (e.g. T-Mobile’s HD2, Sprint’s EVO, Verizon’s Droid Incredible), making Agent sites a treasure-trove for internet-savvy shoppers. However, for those of us eagerly awaiting the release of the iPhone 4 the big question still remains: will Apple and AT&T budge to the pressure (and the website overloads) and allow third-party retailers to carry the iPhone 4 online in addition to the stores?