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At a time when the concept of the carrier-exclusive smartphone is beginning to fade away, Droid endures.
Verizon Wireless’s premier franchise added a new member on Tuesday, the long-lasting Droid Turbo. The smartphone, made by vendor partner Motorola Mobility, comes packed with top-of-the-line specifications, with the marquee feature a large battery able to last 48 hours, showing that it is every bit the flagship product that its namesake implies.
“The Droid brand has always embodied this aggressive, advanced early-adopter, top-of-the-line marketing message,” said Ross Rubin, an analyst at Reticule Research.
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That Verizon and Motorola continue to invest in a legitimate flagship smartphone as an exclusive is a bit of an anomaly in the industry. While other high-profile exclusive flagships have fizzled over the past few years, there remains demand for Droid smartphone. So what’s the secret?
“It fulfills the customers’ needs,” said Jeff Dietel, vice president of marketing for Verizon Wireless. “A lot of other exclusives meet a commercial need, but not a consumer one.
“I could give you several examples,” he said, before hesitating. “Well, I’m not going to give you an example and give you a headline.”
Even without Dietel’s help, there are plenty to choose from. The most recent is the high-profile flop of the Amazon Fire Phone, which was exclusively sold through AT&T. Amazon last week took a $170 million charge to account for its unsold inventory and disclosed it was still sitting on $83 million worth of Fire Phones.
Last year’s big bust was the HTC First, touted as the official “Facebook phone,” also an exclusive with AT&T. Sprint has previously had its share of exclusives that went nowhere, including an Evo line of smartphones that got successively less popular with each model, and the supposed “iPhone killer” in the Palm Pre (it may have performed OK, but it wasn’t enough to turn Palm around).
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While exclusivity deals can be a source of annoyance for consumers, who may not necessarily be on the right carrier for the right smartphone, they have traditionally made business sense. A carrier will promise marketing support and prominent position in its chain of thousands of retail stores in exchange for an exclusive window. For many handset vendors who lack the marketing heft or retail savvy, it’s a good deal.
Things changed when Apple broke free from its exclusivity agreement and brought its iPhone to Verizon in 2011, and followed that up with Sprint and a number of different regional carriers. In 2012, Samsung opted to launch its Galaxy S3 across all of the carriers, an unusual move as the company had a pattern of creating custom versions of its smartphones with each partner.
Within a year, HTC launched its HTC One across all of the major carriers, as did LG and its G2 smartphone. For any high-profile flagship smartphone, exclusivity was passé. There are holdovers, such as the Nokia Lumia 1020 for AT&T, last month’s ZTE Z Max for T-Mobile and even Sony’s Xperia Z3v for Verizon, but most of the flagships tend to across all carriers.
Why Droid works
Droid sits in a unique position because of its heritage. The franchise is actually owned by Verizon, which licensed the name from Lucasfilm, but the carrier has lent the name to a number of vendors.
Motorola, fittingly, created the original Droid in 2009, which came as a result of collaboration with Google and Verizon, all of whom had the common goal of creating a smartphone that would compete against AT&T and the Apple iPhone. It was famously backed with a $100 million marketing campaign, which is where the “Droid Does” tagline originates.
That original base of Droid users, while diminished over time, has stuck around at Verizon in some form. Dietel wouldn’t say how many Droid users are on his network, but said the base has remained fairly consistent even over the past three years.
Sarah Tew / CBS Interactive
Dietel also declined to provide any details on how well the Droid sells, but said it was enough that Verizon is willing to continue investing in splashy launches such as Tuesday’s event.
Befitting the standard perks of an exclusivity deal, the Droid Turbo will benefit from a “unique marketing campaign,” one that will be on TV, radio, but also social and digital, all getting the focused message of a smartphone with endurance and power.
“There’s an awful lot of noise out there,” he said, adding that the Turbo will be marketed as the most important smartphone in the marketplace.
Verizon is also offering unique perks, such as a waived upgrade fee, for anyone purchasing the Droid Turbo, and has promised to replace any Turbo with a cracked screen once over the course of their two-year contract.
With last year’s Droid Mini and Droid Maxx staying in Verizon stores, Dietel said the company still has a wide family of Droid smartphones to sell to consumers, with the older devices sold at competitive prices.
It doesn’t hurt that Verizon boasts 65.4 million smartphone customers, a large base of potential Droid users.
Fuel for a turnaround
While Motorola is largely focused on its core Moto family of smartphones, it has had a hand in two recent high-profile devices: Verizon’s Droid Turbo and the Nexus 6 smartphone for Google.
For Motorola, these devices are part of its plan to turn around both its market share and its waning brand in the business. The company that originally invented the cellphone, Motorola fell on hard times before Google bought the mobility business in 2011. Earlier this year, Google agreed to sell Motorola Mobility to Lenovo in a deal expected to close by the end of the year.
Sarah Tew / CBS Interactive
Motorola is “trying to refresh its presence in the market,” said Jeff Miller, corporate vice president within the company. Miller said that while the Droid Turbo would be exclusive in the US, the company plans to sell the device overseas, where the company has seen an increase in demand for longer lasting smartphones.
While other companies have used the Droid name before, Verizon said last year that Motorola would be the exclusive provider of Droid smartphones, further cementing the companies’ relationship.
“It is an unusual circumstance,” Miller said about the tight collaboration.
The relationship has yielded several benefits. Likely a result of Motorola and Google’s influence, Verizon’s Dietel said he hopes to be the first to upgrade both the Droid Turbo and the older Droid smartphones to the newest version of Android, nicknamed Lollipop. He noted that beyond the Google-controlled Nexus devices, Verizon’s Moto X was the first to get Android KitKat last year. He expects to do the same.
“We understand it’s important to the customer,” he said.
