Verizon – iPhone News Yields Lots of Me Too Posts But Little Analysis
After spotting today’s news of Verizon’s decision to reject an approach from Apple to be the carrier for the iPhone, I jumped over to Techmeme to look for some analysis and found – well, pretty much nothing of any interest. Kedrosky had some interesting comments, but pretty much everything else I’ve read on this story today has sizzle and no steak – big headlines, but content that does nothing other than repeat basic facts. Essentially, a lot of attempts to chase links at the top of Techmeme’s page. (10,000 monkeys comes to mind).
This is a darned shame. The theory is that atomization of media should allow better content to rise to the top. But for the umpteenth time in recent months, I’m seeing evidence that, at least when it comes to writing about tech business, that is rarely the case. There are certainly many more voices, but just about everyone is doing nothing more than copying facts from the MSM, and then wrapping it in a sugary “It will be interesting to see what happens next” coating. And once again, the lingering impression I have after looking to the ‘tropolis for analysis is that I’m wasting my time.
We should be able to do better than this.
Here are just a few angles for some discussions that seem interesting to me:
– is this story just Verizon spin, put out there in an attempt to take a free shot at competitors? Put another way, were the Verizon-Apple negotiations in fact much closer than Verizon is letting on, and are these just sour grapes? I have no reason to believe this is true or untrue, but it’s at least possible, yet no one in the ‘tropolis I’ve read seems to have considered it – everyone I’ve read is simply regurgitating Verizon’s spin on the story
– is this what happens when titan meets titan? The Motorolas of the world have surrendered to the US carriers, it seems, encouraged to do so by the competition among them and the lack of competition among the carriers. Is this what happens when a new player, less concerned with playing nice with the carriers, enters the market? Could Apple be the thin edge of the wedge, or will the lack of competition in wireless preserve the silos and carrier control over the hardware market?
– does it matter that wifi is coming? Will the increasing complexity of devices mean that carriers will have to give up more control?
– in the grand scheme of things, did Cingular actually give anything up? The Apple deal is reported to be a 5 year exclusive – should that be seen as a major concession by an Apple desperate to get its hardware on the shelves?
– why, as was reported, did Apple insist on having the right to make warranty decisions? Presumably because it knows Cingular would be happy to throw Apple’s margins to the wolves to protect Cingular’s recurring revenue from customers. What other factors came into play? Should this be seen as unusual, or is it necessary where the hardware is not your garden variety commodity celphone stuff? Does it relate to Apple’s margin on the iPhone, recently reported to be much thinner than originally guessed? Does this suggest that Apple’s pricing on the iPhone is actually quite aggressive? If so, did the aggressive pricing of the Pearl put any heat on the iPhone launch? And what about RIM generally – to the outsider it seems to be very good at distinguishing itself from the Motorolas, Nokias and Samsungs of the world. What kind of clout does it have when it comes to carriers and does that tell us anything about Apple-Verizon-Cingular?
I don’t really have answers to any of these questions. But they seem like the seeds of decent conversations to have about the Verizon-Apple news. And it’s a little disappointing to see that the MSM may well still be the best game in town for these kinds of conversations.
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Good points. It will be interesting to see what happens next. :)
LOL. Now *that’s* funny …
“I don’t really have answers to any of these questions.”
Pot, Kettle, Black
What a silly thing to say, Anonymous. My post suggested a discussion, and multiple topics for one. If I wanted answers, I’d go to wikipedia. But thanks for helping out.
I once queried an insider at a major mobile manufacturer about what was a trivial technical change to their product design, but which would bring an entire new realm of value to the end user. His response was, “We generally only implement changes that the carriers ask for.” That was a light bulb moment.
In telecom, the carriers are barons in a monarchy.
Dr. Norman Lewis of France Telecom reveals in IT Conversations #1706 http://www.itconversations.com/shows/detail1706.html [How do I do format hyperlinks properly in yet another wiki?] that recovering the debt that the wireless carriers have incurred in buying spectrum and infrastructure would require every GSM subscriber, their spouses, their kids and their dogs to use GSM for six hours per day for the next thirty years.
In wireless, spectrum is the constrained resource, as arable land is an agricultural economy.
Our governments saw spectrum auctions as a means to sell their debt to the pre-bubble, cash-rich, telecom operators. In effect, they exchanged their authority over a large piece of the commons for a one-time capital infusion. Now, instead of all citizens carrying their government’s debt directly, wireless subscribers pay the that portion of the public debt through their monthly plans with their mobile barons.
Terminal manufacturers are to wireless operators as horse breeders are to barons. Yes, they play a role in the economy, but “clout” is hardly a word you could use to describe their influence. Their products are commodities.
In my view, Apple’s introduction of any kind of phone is a gross error. I presume that they are following a similar strategy as what propelled the Mac to success in face of the staid International Business Machine’s attempt at creating personal computers. However, the fundamentals are different. In the 1980’s, Moore’s Law had just put the constrained resource of computing on an exponential trajectory, upward, through the microprocessor. In Clayton Christsen’s model of innovation, computing had large populations of unserved markets yet to conquer.
Wireless telephony today is in almost exactly the opposite situation. The constrained resource, in spectrum, is scarce and getting scarcer, while the markets for mobile synchronous voice are thoroughly served by multiple competitors. The form of the mobile terminal offers only incremental opportunities for innovation, as we see in the iPhone.
The Magna Carta conceded the Crown’s divine authority. However, Britain remained a monarchy for many centuries more.
There is hope for liberation in wireless communication, but I believe that it will come about through a republic, separated from the mother land by a large body of metaphorical water. We can pick that topic up again in another conversation.
Norman – great comment – thanks for leaving it. You really ought to launch your own blog :)