Apple Can't Afford iPhone's Carrier Exclusivity 371
WirePosted writes with an ITWire article about the problems that Apple's AT&T exclusivity deal could pose in the coming years. Initially the company needed AT&T's commitment to the project, to ensure features like visual voicemail would work. With the iPhone a hit even at its current high price that no longer seems to be the case. Can Apple afford to stick to an exclusive carrier in the future? If for no other reason than consumer choice? "iPhones are being sold unlocked in the markets of Asia where you can't get them with a carrier plan, but they're also being bought and unlocked in the US and Europe. The message is that many and probably most iPhone buyers would like to be given a choice of carrier when they buy their iPhone. Some would be prepared to pay more as they do with other smartphones and buy their iPhone unattached to any subsidized carrier contract. The point is many consumers feel no loyalty to carriers and resent being forced to choose one."
There's more here than meets the eye (Score:4, Insightful)
It's also having structured, simple unlimited data plans, which is really what makes the iPhone shine.
It's about doing things like setting your voicemail greeting all through a GUI on the phone, without having to call into some number and follow prompts. (Simple? Sure. Not a big deal? Sure. But still, one little detail among many.)
It's being able to walk out of a retailer with the iPhone sealed in a box (which itself probably has more attention to design than most handsets do), and then the ability to seamlessly activate via iTunes, with a simple selection of choices, in the comfort of one's own home in a fashion fully supported by Apple and the carrier.
It's about expanding the iTunes/iPod/iPhone/iTunes Store ecosystem with a carefully planned strategy.
It's the user experience from end-to-end (peoples' own individual gripes with AT&T or any other carrier aside).
That's the issue, and all of those things take a lot of backend work and cooperation between Apple and the carrier. It's not just a handset; it's a complete end-user experience from purchase, to activation, to use.
And yes, some customers might not "care" about all of these things. The power users, the hackers, the cutting edge geeks. But normal customers are a much larger target, and those are the people reading reviews, and those are the people who will drive to Apple's goal of 10 million iPhones. With wildly varying user experience and differences from carrier to carrier, how will the iPhone be viewed in the eyes of the iPod-buying populace?
And remember, contrary to the article's assertion, since owning an iPhone isn't mandatory, and we presumably have free will, no one is "forced" to do anything.
What about this is so difficult to comprehend?
That, and the fact that AT&T may be giving Apple as much as $200 per activated iPhone, and then 3%/month for existing customers and a staggering 9%/month for new customers on top of it, so that the end-user cost when people buy one in a store is manageable? Yeah, the iPhone might not be "subsidized" in wireless industry parlance, but you bet your ass it's "subsidized".
There's more going on here than "evil Apple" wanting "lock in". Like all products with Apple, it's about more than just buying a commodity...it's getting a pleasant experience along with it, from end-to-end. (Yeah, yeah, insert a billion gripes about how the iPhone sucks for one reason or another here. Go tell that to Google's CEO, who says the iPhone is the first of an entire new generation of products. Yes, this platform really is that special, no matter how much you, personally, might hate Apple, the iPhone, or both.)
Apple has also shown it does these sorts of things -- and going into the mobile handset business is a HUGE foray -- in baby steps. Is it any surprise that the stage we're at now has carrier exclusivity for a variety of reasons, even beyond what I've already articulated above? Just because YOU don't like it or some IT rag pundit waxes philosophic about it doesn't mean it's not the right business decision for Apple at the present juncture. It doesn't matter how many people buy iPhones to unlock them. There is a vibrant unlocking and hacking community for just about any desirable phone, including ones not available in particular markets, etc.
It may be that someday, Apple really can't "afford" carrier exclusivity. And you know what? I'd imagine we'll see a change, then, won't we?
my understanding (Score:5, Insightful)
Apple designed a phone that is very good, and found a carrier that was desperate to play ball and risk a new world order. Apple exclusivity, therefore, serves that new world order. When Apple does not have to cripple a phone in order to insure that the carrier will make enough money. The phone is as Apple wants it for it's customers that are willing to pay for good hardware, not for the carrier customers who largely want believe they are getting a good deal by paying for 'services' throughout a long contract.
And this is where Apple may have blundered, at least in the US. The two year contract. We don't want it, we don't need it. Apple could charge half of what it made with the two year extension, $60, and still likely come out ahead in the long run.
Re:There's more here than meets the eye (Score:4, Insightful)
Exclusivity is the point (Score:2, Insightful)
This idea of Apple being "forced to exclusivity" is ludicrous; they've worked very hard to achieve the exact opposite!
Re:There's more here than meets the eye (Score:1, Insightful)
Re:There's more here than meets the eye (Score:4, Insightful)
Why the iPhone is revolutionary... (Score:4, Insightful)
I've looked at smartphones in the past, and play with them whenever I'm paynig my wireless bill at the store instead of the mail.
Other smartphones don't have web browsers that just works, they don't have email that just works, they don't connect to the computer in a way that just works they don't have a user interface so simple my mom can use it but so powerful I'd love to use it.
I don't have one yet, because I don't NEED a smartphone. But if I wanted a smartphone, rather than just a cellphone, the "It Just Works" factor make it the iPhone or nothing.
Re:There's more here than meets the eye (Score:5, Insightful)
No, most of those are the advantages Apple can give their customers with carrier exclusivity.
What Apple gets from carrier exclusivity is the ability to get a portion of the monthly charges from the carrier. Based on reports, Apple gets a significant portion of the customer's monthly payment to AT&T (and O2 in the UK, and T-Mobile in France, and ...); they would not be able to do that without the exclusivity.
Even $10/month from the customer means that Apple would be getting an additional $240 over the course of the 2-year contract; that's a pretty significant reason to continue to push for exclusivity for a while.
Re:There's more here than meets the eye (Score:5, Insightful)
Indeed. I really hate it when people make things that don't suck. I mean, come on, companies of America. Bring me stuff that's unpleasant. I want the suck!
Why does the designer of the phone have any say at all as to who can service it?
I don't know, perhaps the designer of the phone has features they want to include that aren't part of the standard feature set? Like being able to activate at home without having to wait for a sales droid. Or visual voicemail. Or perhaps they don't want customers of their phones to have to wade through a sea of bizarre contracts and options? But again, that's part of that pleasant experience that you think is wrong.
What's the problem? (Score:3, Insightful)
But that's besides the point.
The article is about going global. No one is saying that Apple really plans to go exclusive around the world for the long term. They'll sign some agreements to get traction with the big carriers, and when 3G arrives, they'll adjust. They'll probably go for less than 5 years exclusive.
Technology changes so fast that this is really a moot point. I'm not even sure why people are getting excited or worried.
as I like to say.. (Score:2, Insightful)
You won't find anywhere on your iPhone to configure the applications because you shouldn't need to.. but if you do, call tech support cause there aint no way to fix it self and the same goes for everything else made by Apple. It's proprietary technology and that's nothing but a disgrace in this day and age.
Re:Why the iPhone is revolutionary... (Score:3, Insightful)
My dads old POS cadillac just "worked." It started every time. No one would call that car revolutionary.
My treo "just works." I can make phone calls and surf the web.
I'm not sure why people keep using this tired old canard, but lots of things "just work."
Re:There's more here than meets the eye (Score:3, Insightful)
Re:There's more here than meets the eye (Score:5, Insightful)
To be absolutely clear--the whole REASON why there's such demand for Apple products is because, unlike many tech companies, they DO care about the entire user experience. It makes using the product simple, easy, convenient. Would people buy Apple products if they WEREN'T easy to use, if that end-to-end experience WASN'T designed? It frustrates me to no end to hear people gripe about "user choice and freedom" but at the same time they covet the simplicity and elegance of Apple's design approach, not realizing that their interfaces and hardware are what they are precisely because it doesn't allow you to customize the crap out of it and ultimately break it in a million ways.
I've owned products by many different companies--Motorola, Samsung, Sony (and those are just mobile phones). And not a single one of them has been anywhere near as successful at designing a mobile phone interface as Apple has. It is called attention to detail. As a former loyal T-Mobile customer, do you think I was happy about having to switch to AT&T for an iPhone? I weighed my decision carefully, and like a mature adult, I made an informed choice. I am not sitting around with my old crappy UNLOCKED Motorola V3x with an indecipherable interface, whining about how the choices presented to me are not the choices I want. Would you be any happier if Apple simply decided not to develop the iPhone at all?
Some people just want to find any reason to complain.
Re:There's more here than meets the eye (Score:2, Insightful)
No one has a problem with a pleasant experience, despite your idiotic interpretation to the contrary. What we have a problem with is the practices Apple is using. They are hardly necessary to ensure a pleasant user experience, and never have been. Apple just chooses to take the easy way.
Re:Another "analysis" missing the point (Score:3, Insightful)
Regarding EDGE Apple could have targeted EDGE enabled telcos. The provisioning in France was a joke - I spent 45 minutes in an Orange Shop, and still cannot change levels of iPhone plans online. Orange still has the normal provisioning system in place. So it seems Jobs only cares about the full experience for American customers. The service revenue of course would not happen, but sadly if he wants to destroy the traditional mobile world getting into bed with dinosaurs like Orange is not the way to go.
Regarding billing systems, I doubt there is much integration.
Mobile operators do all kinds of expensive integration ALL the time often with dubious rates of return. ( I have worked for all major European telcos )
Re:There's more here than meets the eye (Score:5, Insightful)
Re:Why the iPhone is revolutionary... (Score:1, Insightful)
Re:iTunes shouldn't be involved. (Score:4, Insightful)
Notion of phone activation, not GSM-like (Score:4, Insightful)
The whole notion of phone activation is very CDMA like and is not part of the usual GSM experience. The only thing that should take activating is the phone account, and then you are free to move your SIM card from phone to phone. I have never need to activate any GSM phone I have got, so why should I need to do this with the iPhone.
The iPhone has got many things right, but this does not make it a perfect phone. There are still missing features, that some people take for granted in GSM phones, like being able to transmit files and contacts via Bluetooth and MMS messaging, amongst others. Hopefully Apple will correct this or the competition will offer something that is even better, for us to lust over.
Re:There's more here than meets the eye (Score:5, Insightful)
Re:There's more here than meets the eye (Score:5, Insightful)
Rather than contrary, isn't that exactly the article's assertion? That no one is "forced" to buy an iPhone, and thus many who might buy it unlocked/unsubsidized don't because it isn't?
From TFA:
So that represents a lost opportunity cost. Maybe Apple ran those numbers, paid their money and made their choice, deciding the the gain from exclusivity was worth the unlocked instrument sales. If your $200 AT&T subsidy number is right, I supposed that approximates the premium that Apple expects a consumer would pay.
Unless AT&T really didn't do their homework before signing the iPhone deal, I would guess that they only pay Apple the subsidy on activated instruments.
And BTW . .
Your smart-aleckness makes Baby Jesus cry.
Re:There's more here than meets the eye (Score:3, Insightful)
I don't know about anyone else but I want hardware/software not an "experience" from Apple.
Then you don't want Apple, period. Apple's whole raison d'etre is to create a simple and elegant user experience out of complicated computer-related tasks. Apple is not interested in making the fastest or cheapest commodity computer product for other people to customize. Apple creates value to people who want their technology to "just work" by covering the whole product lifecycle with a system that - surprise - as a result limits choice! You want to deeply customize and significantly control your technology experience - you are not Apple's target customer. Buy another phone - you will be happier and Apple won't care or notice.
Seriously - if you want to buy an iPhone and complain about how you can't put Ubuntu on it or something, please don't bother. You're just wasting money and time. Just go buy some commodity hardware from somebody else who doesn't care about "experiences" - it will be cheaper and everybody will be happier.
Re:There's more here than meets the eye (Score:5, Insightful)
My choices are not:
* Buy iPhone from AT&T in the USA
OR
* Move to Europe and get some other cell phone there.
My choices ARE:
* Buy iPhone from AT&T in the USA
OR
* Buy much crappier smartphone, also with 2 year contract with some carrier I may or may not like
OR
* Buy utilitarian phone, also with a 2 year contract so that the phone is subsidized.
I bought an iPhone for $399 (you know; what they *actually* cost, not $600). I don't see the big deal. My previous phone cost $150 for a "dumb" phone thru Verizon with 2 year contract, and Verizon is the devil.
Unlike most Americans, though, I'm not used to contracts because in the past I bought unlocked GSM phones from eBay and used them sans contract on Cingular (so I was actually happy to have the iPhone excuse to ditch Verizon and their crappy call quality and dropped calls at busy times). Back when the Ericsson T39 was hot, I bought it new on eBay from the UK, I think i paid $299. My next phone (4 years later) was a Samsung D50 slider that was just a little under $400. So $400 for the iPhone was no issue. I don't particularly like being stuck with a contract, but I've used AT&T before and am more than happy to stay with them for 2 years. Frankly, compared to the rest of the market, what I get for $400 is so much more than I've gotten in the past. Both my previous expensive phones were very nice and everything, but they weren't above and beyond different from the competition like the iPhone. And I've used Windows Mobile, for 2 weeks, before I got rid of the phone out of utter frustration.
Re:There's more here than meets the eye (Score:3, Insightful)
Well that's exactly what people are suggesting. I mean, what were you thinking? No one is suggesting this should be illegal for Apple to do! But it is certainly fair game to criticise them, point out flaws in their product and suggest buying something else.
After all, Microsoft gets enough flak (including legal troubles, for them) for trying to coerce people into using its media software.
His "frothing at the mouth" is probably because we hear about Iphone-this-Iphone-that, and rarely about any other phone. So obviously it is fair game to criticise the product when it is being treated as a higher standard. (Although I don't see his post has anymore full of anger than yours - I think you're reading too much into it.)
Re:Why the iPhone is revolutionary... (Score:3, Insightful)
If the market had really got to the stage where just working was "revolutionary", don't you think there would have been more of an uproar about the state of other phones? But no, everyone else carries on with their phones working just fine.
I don't have one yet, because I don't NEED a smartphone.
So you don't even have one, or any smartphone, but you make these claims? See, this is the problem. People ask reasonable questions on why it is revolutionary, and we get these nonsensical buzzwords "Oh hey, it Just WorksTM, Think DifferentTM", which then gets modded up, but still, no one is any wiser as to what's good about it. If people tried the same justifications on any non-Apple story, they'd quickly be modded down and ignored.
nothing new (Score:3, Insightful)
T-Mobile has had those for half a dozen years for the Danger Hiptop.
It's about expanding the iTunes/iPod/iPhone/iTunes Store ecosystem with a carefully planned strategy.
Yes, that is what it is about: vendor lock-in. And that's why Apple is evil.
It may be that someday, Apple really can't "afford" carrier exclusivity. And you know what? I'd imagine we'll see a change, then, won't we?
You don't seriously believe that Apple has a lot of time on their hands? This isn't the desktop market, where Microsoft's monopoly has slowed progress to a crawl; Apple's features and UI will be cloned and improved upon within six months by a dozen phones, and at half the price.
Re:There's more here than meets the eye (Score:3, Insightful)
Re:There's more here than meets the eye (Score:3, Insightful)
The way a Mac enthusiast uses the phrase "getting it" strikes me as somewhat cultish.
N/A (Score:1, Insightful)
No.
The message is that many potential buyers would like to be given a choice to buy this thing. At all. Not everyone who can afford an iPhone is from the US, Germany or France. I can't buy one and use it reasonably without unlocking it.
Re:Why the iPhone is revolutionary... (Score:2, Insightful)
When I receive an e-mail (corporate or personal), the email shows up on my handset before it does on my computer, and it has a physical keyboard with actual buttons - tactile feedback. When I add an appointment to the calendar on my computer or on my device, it syncs almost instantaneously. So the BlackBerry addresses the features that I want, and the iPhone doesn't. Therefore, I don't want an iPhone.
So what?
If you think it's a bad device, don't buy it. If you like it, buy it. Why argue about it? Who cares what types of devices other people are using. I don't care whether you're calling me from a bag phone, as long as I can hear you. I don't care how you see the web when you browse from your phone, it doesn't affect my life in any way. I don't care that you can see your voice mail on your screen. If those are features that are useful for you, buy the thing and get on with your life. If you don't care about those things, or don't want to pay $399, or if you don't like it for whatever reason, buy something else... it's your choice.
I do have to say though - one thing that does bother me to no end - is the "look at my iPhone" people. Not every iPhone owner is like this, but there are some out there. You know who you are, and if you're not, you've met one. These are the people who show off the device whenever the opportunity arises. Example: You mention a funny video you saw on YouTube. You may get this reaction - "I saw that too... wait, let me pull it up on my iPhone.
Re:There's more here than meets the eye (Score:1, Insightful)
Who ever thought moving forward in interface design meant hidden interface gestures. You don't even know what they're going to do until you do them. Weird.
Re:There's more here than meets the eye (Score:3, Insightful)
What'd you post that comment from, then? An iPhone or something? You need a computer to use an iPod, too. Is that really such a huge problem?
Re:There's more here than meets the eye (Score:3, Insightful)
Now, let me just say that I don't play games. This is probably the one part of the mac experience that is lagging behind, but I don't really care. I do scientific work on my Mac and it is really simpler and more pleasurable to use. Even though my Gentoo setup doesn't really require a lot of work these days (just updates every now and again), I have never run a linux setup that is quite as straightforward as the Mac.
Here's the interesting thing. Apple has some of the best usability research out there. They really want people to be able to use their computers. Many people find their interfaces "simpler and more pleasurable to use". How is it that you can determine that all this is wrong? Yes, when I switched I was pissed that there was no delete key. Now I am pretty pissed when I try to work on Windows and backspace doesn't delete stuff. The menu thing is also pretty well thought out -- it comes down to having a larger target for hitting the menu items, because the cursor doesn't go off the screen. Quite logical, really. Similarly for dialog boxes. Research shows that people don't really read the text of a box, so the Apple guidelines require verbs on the buttons, so I have to click "Delete" instead of "OK". I have become a bit lazy, so when Windows programs pop up an OK/Cancel dialog box, I have to do a double take.
Lastly, on the idea that research into usability is useless ("there are no facts whatsoever which are relevant"), I must say that part of my research is Human/Machine interfacing and there are really some facts which are relevant, like the fact that most computer novices find multiple mouse buttons confusing, that acquisition of the menu bar in Windows takes longer on average than on Mac OS, that people don't read dialog box text. I would link to references, but frankly that wouldn't change your mind. But next time you feel the need to bash the Mac GUI, it would be nice if you did it after spending some time (a few weeks) with it, rather than just complaining that you still expect things to work the way they did on some other system.
Re:There's more here than meets the eye (Score:5, Insightful)
Is it illegal for americans to import their own unlocked cellphone from abroad? That's certainly what I would do.
You can't be serious. Two years is longer than the projected lifespan of the phone, even if you treat it nicely. And most people who rushed to buy their iPhone want a new phone within two years, regardless of whether it lasts that long, or not. Besides, the contract sucks horseshit regardless of how long it is, making the horseshit last two years isn't going to make it any better.
Also, I'm not interested in whether AT&T is going to raise the rates. The rates they already have are already astronomical! What I want is a free market, and that means that I'm not locked to two year contracts, and can change provider any time I feel like it. A cell-phone carrier is not something that should need your first-born son just to be able to sell you their service.
Finally, I see no reason why an over-hyped but somewhat fashionable touch-screen phone should need to play a different ball-game than all the other phones on the market. Especially when the rules of the new ball-game is to get screwed, over and over again, by bending over and letting corporate shitheads put their contracts so deep into your anus you start to blead. If they should change the rules, they should instead have tried to make it a fair game, but I guess that's asking a bit too much.
Re:Why the iPhone is revolutionary... (Score:3, Insightful)
Most of them 'just work.'
For some value of 'just work.'
Apple's browser has real limitations too, but a fanboy on your level wouldnt be able to admit to them.
Yes it does. You'll note I never said mobilesafari is the pinnacle of design or perfection of the mobile browser concept. No, apparently when someone suggests anything positive about anything apple, that to you is evidence of irrational thought and a desire to tech-fellate steve jobs. What an idiotic view.
Interfaces are not that difficult anymore. We're not teaching people DOS.
Are you really going to argue that all windowing interfaces are equally good/easy/useful? Seriously? Applying a 'its-not-DOS' heuristic to interfaces is pretty friggin weak.
Just because Apple takes the "show them less" approach doesnt make them better.
Talk about a tired old canard. 'Just shows them less' is about as asinine as you can get.
I always feel like my hands are tied when using OSX until I can open a terminal window. Joe Sixpack isnt opening a terminal window.
So you've just shown that 1. you aren't joe sixpack and 2....well pretty much only #1. That you need a terminal window to interface with a computer says you aren't doing the things that pretty much everyone else in the computer using public is. I love the fact that I can drop down to the terminal when the need arises, but honestly that is pretty rare (and one of the things I didnt really like about linux back in the decade I was using it, a terminal window is pretty much necessary, not a tool that is only rarely needed). And if you need a terminal to feel comfy, what the hell do you do on an XP box? And to counter your assertion with another equally valid (and likely more common) one: I always feel like I'm banging my head on a wall when I have to use XP at work.
unusual idea of not worshiping OSX and Apple and revealing the real limitations they have....Or that the brushed aluminum look isnt the paragon of design....
Rabid belittling of a strawman. OSX has plenty of limitations. Brushed aluminum is not the paragon of design. Happy? Have I (or anybody save your strawman) ever claimed otherwise?
Not to mention I have the "unusual idea" that little UI changes arent revoltionary, they're barely evolutionary.
No, rather you seem unable to accept that a lot of little UI changes that are evolutionary all put together actually make a difference. I don't give a crap if the UI improvements are minor, major, revolutionary, or nearly individually imperceptible, if they make it so I don't have to fight with or search around in my computer, I consider them good and useful.
Or I have the "unsual idea" that showing me less isnt better for me.
People always throw that one out...care to give me some examples of this? What generally useful features from another mainstream OS are so buried or unavailable in OSX?
Or that I prefer a ,gasp, real keyboard and not a virtualized one.
So for web browsing (which is where this topic started), you prefer the tradeoff of having a 40% reduction in screen size in order to have a tiny keyboard for the relatively small proportion of time you actually type while browsing? I don't think that is a good trade, even though I often find the virtual keyboard frustrating, It is sucky for emails and other text intensive functions (though most mobile keyboards are all somewhat crappy, physical or not), but browsing is probably one of the better circumstances for the large screen/no physical keyboard trade.
but youre assumptions and apple ass-kissing are far