Worst of the Week: Loyalty and smartphones

Hello!
And welcome to our Thursday column, Worst of the Week. There’s a lot of nutty stuff that goes on in this industry, so this column is a chance for us at RCRWireless.com to rant and rave about whatever rubs us the wrong way. We hope you enjoy it!
And without further ado:
So the G1 has gotten me thinking, which is both difficult and dangerous. But that’s beside the point.
The point is that the G1 – the world’s latest smartphone, built by HTC with software from Google and connections from T-Mobile USA – is just the latest example of the fractured banding landscape in the wireless industry. Think about it: G1 owners will have plenty of brands on which to spread their loyalty. There’s the service provider, the software provider and the hardware provider – and that list doesn’t include potentially thousands of third-party application providers.
This situation is rapidly becoming the norm, as smartphones begin to push into turf traditionally held by voice-centric devices. Indeed, according to Gartner, smartphone sales grew a whopping 16% in the second quarter, worldwide, accounting for 11% of the overall cellphone market.
So what does this mean? It means that the world’s wireless market is getting a new dimension: software and services. It means that people will no longer base their purchasing decision on a mixture of carrier and hardware maker. Instead, they will now add software vendor – and, potentially, access to third-party applications – to the process.
Granted, this situation isn’t new. Widows Mobile has long sat between carriers and hardware makers as the third element in the cellphone-purchasing-decision-process. The same goes for Symbian, though it doesn’t enjoy the same name recognition as Microsoft. And Research In Motion and Apple essentially narrow the choice down to two, since they both combine the hardware with their operating system.
But what is different with the G1 is the brand recognition that Google brings to the table. Google is the top brand in market research firm Millward Brown’s Top 100 Most Powerful Brands ranking. Google was No. 1 last year as well. Note that T-Mobile USA is No. 83, just below Tide. HTC does not appear on the list. (Interestingly, Microsoft is No. 3 and Apple No. 7.)
So what’s the point? The point is that wireless carriers have long worked to promote their brand above all others in the wireless space. Why else would carriers be so keen to stamp their brand on the devices they sell, and even go so far as to erase a manufacturer’s brand completely (I’m looking at you, Verizon Wireless).
But now, in the smartphone world, ubiquitous service is taken for granted and allegiance is granted to whoever offers the slickest user interface. Indeed, the tone prevalent across wireless blogs and user forums is that wireless providers are a necessary evil that must be dealt with and then forgotten in the rush to grab the latest touchscreen marvel.
What does this mean for the wireless industry? Frankly, I don’t know. But I’ll end this column with a personal observation that may or may not have any relevance to the discussion: Over the past few months I have seen at least a half-dozen cars with Apple’s logo pasted to the rear window or bumper. I have never, ever seen a car with a wireless carrier’s logo.
OK! Enough of that.
Thanks for checking out this Worst of the Week column. And now, some extras:
–Nokia Siemens Networks announced it is in the beginning stages of rolling out an HSPA network in Uzbekistan. So T-Mobile USA can take comfort in the fact that it will at least beat Uzbek carrier FE Coscom in the race to 3G.
–Apple announced it will recall the power adaptor sold with its iPhone 3G. This news may or may not be related to the Bush administration’s plan to pump $700 billion into the nation’s financial markets.
–According to Internet rumors, Nokia Corp. is finally planning to reveal its own touchscreen phone. In related news, Motorola Inc. recently released some new Bluetooth headsets. You go Moto!
I welcome your comments. Please send me an e-mail at mdano@crain.com. Or, if you prefer, leave a comment in the space below.