Why AT&T and Verizon Are Rooting for Windows Phones
bits.blogs.nytimes.com
bits.blogs.nytimes.com
I look forward to the day when mobile carriers are nothing but dumb pipes. Maybe then they'll focus on providing the most bandwidth and best coverage, instead of crap apps that no one cares about.
So what's the concern here? Carriers aren't idiots - is carrier commoditization necessarily a bad thing?
Depends on the POV you're considering.
From the POV of the carriers it's a very, very bad thing as it's going to eat into their money and their control. For some manufacturers it's not a good thing as they build handsets for carriers who may not want handsets built specifically for them once they're "nothing but dumb pipes".
For pretty much everybody else, it'll be a great day.
I think manufacturers are very pissed at having to make a different model for each carrier or make slight changes in the design and naming for each carrier.
This is the reason that Nokia stopped dealing with carriers and went the unlocked route a few years before having to eat crow and get back into bed with the carriers this year.
The manufacturers would be very happy to make one model and be able to sell it on multiple carriers with consistent naming.
I'm guessing that depends on the carrier, Nokia had power and brand name but HTC was founded as a strict ODM.
The advantage is that you get money to build the phone (to specs, and usually shitty, but still build it) and are cushioned from device failure: currently, carriers want many devices in their portfolio (even if most barely sell).
Long term, yes, running a network is not going to afford them the kind of lock-in revenue they are accustomed to. I"m sure they know this. But still, they have a duty to their shareholders to produce revenue now.
They're only irrational if you see an obvious course to a future of greater profits. But you don't provide one, and frankly I don't see one either. The phone industry is going to need to shrink, revenue-wise.
The cost structures, swivel-chair automation, arthritic processes, lack of an ability to rationalise their portfolios (many decision-makers on the infrastructure side don't even know what a portfolio is, let alone what rationalisation means, and why this might just help) lead them to panic every time people start cutting their cords (first copper, but soon anything that can be replaced by OTT services) and that is visible to their investors.
As someone (occasionally) on the inside, they are irrational, they are flailing, and yet they have no real sense of urgency as their escape paths from likely commoditisation are colonised by nimbler players.
[edit: I read the phrase "delusional flailing" as "delusional failing", but the essence is similar enough]
There's a real chance that consumer acceptance of the incredible range of Android phones is predicated on their belief that the Android brand makes those phones largely comparable, if not compatible.
So if manufacturers go a more Amazon-ish route with Android in retaliation for Google's buying Motorola, it's entirely possible that consumers may not be willing to follow the smaller outfits. And that would mean a further concentration of sales under the handful of manufacturers that do have some individual pull with consumers (say, HTC and Samsung). Which would only exacerbate the carriers' problem of not-enough-phone-manufacturers-at-each-others-throats.
Not sure why that would be, surely while Apple dictates their asking price they don't dictate financed price do they? So that's a self-inflicted wound, and one which carriers could fix by financing the phone less.
On the other hand, the iPhone precludes almost all carrier control, they don't control the initial load, they don't control the updates, ... Carriers control some features Apple gives them hooks for (e.g. tethering), but that's about it. And customers become loyal to the device (and its manufacturer) rather than the carrier, not hesitating jumping ships to a carrier providing the device.
> Carriers need a third player, to push down financed device costs
It's not like Apple had much say in this back in 2007~2008, and BlackBerry was still there...
I don't see sensible support for this narrative.
The fact is that margins are down at Sprint, Verizon and AT&T because of the iPhone.
Last quarter:
http://business.time.com/2012/02/08/how-apples-iphone-actual...
This quarter, AT&T's and Verizon's profits are up because of lower iPhone sales:
http://www.reuters.com/article/2012/04/24/us-att-idUSBRE83N0...
I think Apple won't be too happy with it's primary device more expensive than $199 on contract as that's the sweet spot and any increase will cut into sales.
Apple's stock is down about 13% in two weeks because the carriers are getting tired of razor thin margins on iPhones while Apple laughs all the way to the bank and are pushing back. Not to mention the lower sales of iPhones this quarter.
http://blogs.marketwatch.com/thetell/2012/04/23/apple-slips-...
http://money.cnn.com/2012/04/24/technology/att-verizon-iphon...
Also, I call bullshit on the "razor thin margins" that carriers are making. They make plenty over the lifetime of the device contracts. Also, ask Sprint if it would like to get rid of it's iPhone deal. They are getting plenty of new subscribers thanks to the iPhone and are banking on making up their initial loss over time on their new contracts. http://www.networkworld.com/community/blog/analyst-who-downg...
The problem comes in on their aggressive upgrade policies. In fact, I believe Verizon just added a $30 fee for upgrades on 2 year contracts.
Apple's stock is down because the market is full of idiots. Analysts have bet against Apple for years and every quarter Apple has come up on top. I'll bet dollars to doughnuts that this quarter won't be any different and overall sales will be through the roof.
Little to none, what they have is control of the airwaves and lobbying power.
Even the underlying tech generally isn't theirs, the network hardware is built by NEC, Nokia or other such manufacturers.
Prediction: Google and Apple spin off a new, jointly owned company that enters the wireless market by buying sprint and /or t-mobile, and they create the wireless internet we need, not the one we deserve.
"The carriers are tired of Apple calling all the shots[...]"
IMO, with Apple's momentum right now it will take A LOT to eat into their market, maybe that's why they are betting on Microsoft.