Mobile carriers move to put their names on more phones

U.S. cell phone operators, hoping to bolster their brands, are flirting with selling handsets that feature their names exclusively.

The effort, which follows a trend in Asia and Europe, means the companies may eventually sell more models that do not include the names of popular manufacturers. In October, T-Mobile released a device, the Sidekick, that send and receives e-mail messages and is made by Sharp but it features only the T-Mobile brand. In August, Sprint started selling a mobile phone built by Pantech, a Korean company, without the maker's name.

More of these handsets are likely to come, analysts say, because U.S. cell phone carriers want to better manage and tailor features and services on the phones. And by working directly with "no name" manufacturers in Taiwan, South Korea and elsewhere, they might also gain leverage over phone makers and potentially reduce their costs.

The operators "are looking to control the hearts and minds of the end user," said John Jackson, an analyst with the Yankee Group, a market research firm. "It's an exercise taking place worldwide as operators look to build consumer affinity."

Still, the strategy could threaten the long and fruitful, but in some ways fragile, relationship of phone operators and makers. The five largest U.S. carriers buy about $12 billion a year in handsets from the manufacturers, Jackson said, and the two sides have an interest in keeping each other alive.

Consumers know the manufacturers' brands, and studies show they choose a phone based partly on who makes it. The biggest makers, like Motorola, Nokia and Kyocera, spend heavily to market their phones. They also develop features for their phones that the operators would be hard pressed to replicate.

While Asian carriers in particular have eliminated the brand names of phone makers and use low-cost manufacturers, similar efforts in the United States are only starting. With the American market reaching saturation, competition to retain customers has intensified so operators are trying to build brand loyalty.

About a year and a half ago, Cingular Wireless, the largest U.S. cellular phone company, began internal discussions about whether to produce its own branded phone, said a spokesman, Clay Owen. The company, he said, wanted to create lower-cost phones using off-brand manufacturers and make Cingular's name more prominent.

"If you've got any brand loyalty you can leverage, that's a factor in creating phones with exclusive brands," he said.