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Sprint Nextel was the first US major to recognize the importance, to a successful mobile broadband business model, of extending connectivity well beyond handsets, to a full range of business and entertainment devices. Now, with Sprint's Xohm network aiming to reap the rewards of this foresight, AT&T is responding, forming a new division called Emerging Devices, National Distribution and Resale.

This will be headed by Glenn Lurie, formerly president of national distribution for AT&T Mobility, and will focus on developing products and services for a variety of emerging wireless devices beyond the traditional handset. These will include CE products, mobile internet devices (MIDs), in-car entertainment and navigation systems, cameras and machine-to-machine systems.

"There is also a host of exciting new applications - from social networking to navigation to location-based solutions - being developed that will rely on wireless connectivity," Lurie said.

The initiative also highlights how carriers aim to gain an upper hand in defining the new generation of mobile devices, to increase their product differentiation - as devices, such as the iPhone, increasingly drive customer uptake of new services - and to reduce their dependence on handset makers. In the US in particular, carriers can leverage their strong retail distribution arms to increase their power still further. AT&T says its new activities will be supported by its own network of 2,000 retail stores and its agreements with major retailers such as Best Buy, Wal-Mart, Costco and RadioShack.

The operator said this network would give it "widespread distribution options" for the new products. "Once we select a new emerging device, we can then work with our partner to decide on the best distribution channels to sell it," Lurie said. Emulating the model common in Japan and Korea, AT&T is clearly looking to steer the creation of new, competitive devices and form strong partnerships with manufacturers, which can tap into the "enormous economies of scale" of its retail outlets and GSM/HSPA network.

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