It’s an increasingly awkward dance between U.S. wireless carriers and handset manufacturers as phone makers begin to assert their independence from operators.
Handsets don’t work without the network and networks are useless without handsets. Neither can go solo.
Or can they?
It’s no secret that in Europe, handsets are not tied to specific carriers. In the States though, a wireless customer has to jump through a number of hoops to get a particular handset to function on a foreign network.
However, a few recent unrelated statements lead me to believe power is shifting between carriers and handset manufacturers.
- As is often the case in wireless today, it starts with the Razr. People liked it and started demanding Razrs. (And here’s a shout out to the LG VX8300, which M:Metrics says is now the nation’s most popular handset. But the phone doesn’t have a catchy name so likely is being sold soley on its looks and features-and subsidies). Some industry watchers have gone so far as to say the lack of the Razr at Sprint Nextel Corp. contributed to the carrier’s less-than-stellar second-quarter financials.
- Meanwhile, big-box retailer Best Buy is teaming with the U.K.’s largest independent retailer, Carphone Warehouse, to test the mobile waters. Best Buy is offering close to 100 devices from seven carriers at mobile-only stores in New York City. This follows Motorola and Nokia opening their own branded stores in a few select U.S. locations.
- Nokia executives speaking at Nokia World (not carrier world) said U.S. carriers are “marketing and billing machines” and that the U.S. practice of subsidizing handsets doesn’t play to the strengths of the world’s largest handset manufacturer. Nokia also commented on how carriers’ walled gardens won’t hold up as a sustainable business model in the long term. Isn’t a limited handset selection the ultimate walled garden?
- Finally, as we’ve mentioned a few times in recent weeks, the Library of Congress ruling that an unlocked cell phone does not infringe on any copyright law could be the crack to a wide open door where handset manufacturers sell their wares separate from carrier contracts.
Today, if you’re enamored with Samsung’s BlackJack handset, you need to become a Cingular customer. And the BlackJack is being showcased in TV advertising. That’s a boon for Cingular today because if people are in love with the BlackJack, they’ll have to move to Cingular to become customers. But unless Cingular paid for long-term exclusivity, the BlackJack will be sold by another carrier or, like the Razr, virtually all of the carriers in the near future.
While carriers have long taken the lead in the dance, perhaps handset makers are ready to do some leading of their own.
