iOpener
Ah, the iPhone. The much-hyped Jesus phone that launched in late June has been one interesting roller coaster ride. I have been monitoring this situation closely the moment people started lining up to purchase the over-hyped smart phone offering from Apple. While I did grow sick of the coverage at times, I felt that it was necessary to keep tabs on it because I knew there would be some lessons to learn with the first generation of the iPhone and Apple’s relationship with AT&T.
When Steve Jobs first displayed the iPhone, I’m sure that many mobile phone manufacturers were sent into a tailspin. Apple had entered the cell phone business with an eye-catching interface and design that made admirers drool for months. Many cell phone makers scrambled to launch iPhone competitors – I own one of them, which is the Samsung Upstage – and to rethink how they have designed phones for the first time in a long time. Cell phone industry CEOs braced themselves for a possible loss in profits as they realized customers, based on unofficial poll results, would be willing to switch to AT&T just for the iPhone. ‘IHype” for the iPhone grew into a monster that was on course to gobble up the carcasses of the cell phone manufactures and carriers. Okay, I’m overexaggerating, but no one can argue that the iPhone made the industry take notice. After all, Apple single-handedly won the MP3 player battle before it even begun with a little personal device called the iPod.
For consumers, the iPhone’s “radical” design, beautiful looks, and even the iHype was a good thing. It was good because it meant more advanced phones with better features and design would finally be introduced into American markets and not just Asia and Europe. The American cellular industry has always been years behind other industrialized countries in terms of advanced phones and next generation features. Apple’s foray into the cell phone business actually made manufacturers think outside of the box for a change. Unfortunately, most of that thinking was a “me too phone” with a touch screen that’s not as beautiful as the iPhone (so far) and phones with more striking looks. Nevertheless, at least it was a response to think beyond thin flip phones (the dominating phone design), thin candy bar style phones (becoming more and more rare), slider phones (which are too few in supply in my opinion), and boring smart phones (which were primarily designed for business users and lacked style). The iPhone’s launch was good for the non-AT&T carriers because there was a period where some carriers were actually inclined to provide better customer service just in case anyone was thinking about switching to AT&T. I recall walking into to my local SprintNextel store and receiving better assistance than ever right before and immediately after the iPhone launch. Even AT&T, my other cell phone carrier, was nicer to me than usual. I remember calling about an account question and was told by a friendly operator that I could upgrade, which was earlier than normal upgrade opportunities I’ve had in the past when AT&T was known as Cingular. It just so happened that this upgrade opportunity occurred before the iPhone launch. Coincidence? Hardly. They were giving me the opportunity to spend $500.00 on the new “it” phone for the year. I passed, which was actually for the better considering the issues and controversy that have surrounded the iPhone lately. There is no doubt that the iPhone was an outright challenge to other cell phone manufacturers and cell phone carriers who weren’t AT&T. It has also made many American consumers open their eyes and realize what we’re not getting: real freedom of choice in using any phone on any network.
I have already previously discussed my feelings about the American cellular phone business and why we are in the dark ages in some respects. While all major cell phone carriers in the US offer similar services to their customers, they offer limited choices when it comes to the cell phone you buy. In America, I can’t buy any phone I want and use it with any cell phone carrier I want. The differences in networking standards is the major cause when it comes to this problem, resulting in less choice for consumers. For those who may not be hip to networking standards, here are a couple of examples:
- Your SprintNextel phone won’t work with AT&T or T-Mobile.
- Your T-Mobile phone won’t work with Verizon or Sprint Nextel.
- Your Nextel phone won’t work with anything other than Nextel (the iDEN network)…until that standard goes away thanks to the entirely useless and pointless SprintNextel merger.
While it’s true you can have your carrier unlock your phone to use it on a compatible network (an AT&T GSM phone for use on the T-Mobile network), some features will not work properly. This is because the phone you use has phone features that are strictly controlled by the cell phone carrier; therefore, those carrier-specific features will only work with the carrier you purchased your phone from. Because of network incompatibility issues, you are generally stuck with the selection of phones your carrier offers. In America, cell phone selection can range from pretty good to pretty bad, depending who you’re with. For instance, Verizon Wireless customers always raved about the network but complained about the lackluster phones offered by the carrier. They’ve improved their cell phone offerings yet are still lagging, in my opinion, in comparison to other carriers. On the other hand, you have AT&T offering the widest selection of cell phones, but the EDGE network – think dial-up in terms of speed – has been one of the major complaints lately, especially by iPhone owners.
Now, imagine an American cellular industry with one network standard (GSM) and the ability for consumers to buy any GSM-capable phone and obtain service from the carrier they want to use? Seems odd, doesn’t it? However, that’s pretty much the way things are in the rest of the world, which is especially true in Asia. If there was one network standard and if an “open source” cell phone industry existed in America, carriers wouldn’t have to worry [as much] about losing customers. Consumers could buy the iPhone and use it with the carrier they already have, assuming they were happy with their service. This would only benefit Apple in terms of profits. It would also prevent a customer exodus to one carrier because there wouldn’t be non-exclusivity with the iPhone. Carriers would have to compete for your dollars based on features and services offered. While I’m using my argument points in regards to the iPhone, my points can be applied to any “it” phone that becomes the new must-have cell phone.
What I just described is cell phone utopia for American consumers; however, this scenario will likely never happen. The US government won’t introduce regulation to make all carriers use one network standard, which would allow us the freedom to choose any phone and use any carrier. The major cell phone carriers have a lot of lobbyists working hard to make sure that doesn’t happen, and because of that, we’re stuck with a web of network standards that limit the choices we have as consumers. As a result, we’re forced to wait and see if our carrier will offer up the new “it” phone after 3-6 months of carrier exclusivity…unless it’s the iPhone.