Give Nokia (NOK) CEO Stephen Elop credit for thinking outside the box. In an interview with CNET, Elop defended his company’s decision to make its flagship Lumia 920 device an exclusive for AT&T (T) even though the company has been struggling to gain traction recently and could use more exposure to a wider audience. Elop’s logic behind signing a carrier exclusivity agreement is that carriers that get exclusive devices will put more money into marketing those devices and thus boost consumer excitement and demand for them.
“One of the things we had learned with the first launch was being very narrow would yield better results for us,” Elop said. “We take a product and go exclusive with a particular carrier. In a market where subsidy and marketing dollars are heavy, we encourage them to promote it as a hero product, and use the subsidy to drive down the pricing to a competitive point. It also gives you access to in-store resources.”
Exclusivity deals worked out pretty well for Apple (AAPL) back when the company first released its iPhone, of course, although the smartphone market was significantly less crowded at the time and Apple was already one of the most popular tech companies in the world. Nokia, by contrast, has fallen on hard times and has seen its once-dominant market share decimated by both the iPhone and a large assortment of Android smartphones, so it’s not clear whether exclusivity deals for the Lumia 920 will really be all that beneficial.