Hello! And welcome to our Friday 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:
This past week and a half were marked by quarterly results from some of the nation’s largest wireless operators, each showing an interesting challenge that remain in the mobile space. That challenge is Apple’s iPhone and how to deal with it.
From a consumer point of view, the more iPhone the better, seems to be the call. What this translates to is that if you carry the iPhone, then people will more seriously look at signing up for your service. Don’t carry the iPhone? Well, you better offer something extra special that can somehow make up for that void. (Someone thinks that “extra special” thing is a good girl gone bad.)
For carriers this challenge comes with the high price tag that is required to subsidize that device to a price point that Apple seems to dictate. Of course, in a free market, no one can really dictate what something should sell for, but when it comes to Apple I would assume that everyone just looks the other way.
This is not a new challenge, and is one that wireless carriers have been burdened with ever since the iPhone hit the market, and more specifically a few months later when Apple cut the retail price of the device to its now standard $200. The funniest thing about this was that it came at a time when carriers were just getting into the whole smartphone genre and talking up this segments ability to support higher phone prices and lower subsidies. Ah Apple, you are so much fun.
Carriers for years have rattled their sabers claiming they would throw their support behind alternative smartphones in an attempt to sway consumers to choose a device that requires a lower subsidy. However, consumers have answered with their checkbooks, seeming to indicate that in most instances that it’s the iPhone or nothing.
(Heck, the iPhone is so compelling that smugglers have come up with interesting ways in which to get more devices.)
This week witnessed more of these calls as carriers hinted they would throw more marketing efforts around Android-powered devices or would again welcome a third alternative. However, it seems that consumers remained confused by the multitude of Android-powered slabs on the market as well as oblivious to any third alternative besides perhaps BlackBerry, and we all know how well that’s going.
But, with Apple having more money than (name your favorite deity), and by that I mean enough to throw around at celebrities to hype their products that really don’t seem to need any hype, what chance to carriers have in at least the near-term? From my own unofficial census of the buying public, when given the chance to acquire either an iPhone or any other smartphone with a superior feature spec, it’s not even a close call. Some of the more “nerdy” faction may go for something other than Apple due to the closed nature of iOS, but that group is much too small to have an impact on sales and overall device influence.
What are carriers to do? Well, with an LTE-equipped iPhone expected by year end, carriers could take this chance to stand up to their Apple overlord and say that the new starting price point for an iPhone should be $300. Some carriers have already begun rolling out top-end LTE devices at that price point, and in some cases have maintained that pricing, which shows that perhaps consumers are willing to spend a few more dollars for something special.
And with rumors running rampant (already!) that the next iPhone will be built from some futuristic material mined from Asteroids, that would seem to be something special enough to make consumers lose control of their wallets.
Of course the only way this plan would work is if somehow Apple could make more money out of the deal, and that’s up to the component makers and laborers in China to decide. My pessimistic guess: Carriers will be stifled by the iPhone syndrome for years to come.
OK, enough of that.
Thanks for checking out this week’s Worst of the Week column. And now for some extras:
–The current “4G” marketing hype has as we all know reached sickening proportions. Much of this marketing mess can be traced back to Sprint Nextel and its initial WiMAX launch that some have said forced its rivals to both speed up their own LTE deployment plans as well as amped up the amount of marketing hype surrounding a cryptic technology.
But, with Clearwire’s WiMAX network now seemingly dead ended at around 130 million potential customers covered, yet still being marketed to the masses as 4G, this got me thinking that perhaps someone needs to start putting that “4G” tab to a Wi-Fi service. I would guess that current open Wi-Fi networks cover at least that many people in places they travel every day, so why not. Every phone with Wi-Fi can be a “4G” device.
—PCWorld recently came out with its latest rankings of the nation’s fastest “4G” networks, proclaiming AT&T Mobility’s LTE-based service as the speed king. Good for AT&T Mobility, which has been hammered in the press for its lackluster network capabilities, and no surprise that they sent out the news to just about anyone willing to listen.
Of course, having very few people on a new network is always a recipe for higher speeds. Let’s see how this all plays out a few years from now once all of those LTE-equipped iPhone fiends figure out how cool it is to stream video.
—Clearwire named its initial TDD-LTE market plans this week, noting those lucky people in New York City, San Francisco, Los Angeles, Chicago and Seattle, among a total of 31 markets, would be the first to bathe in that carrier’s new network offering. Clearwire added that those commercial launches would take place by mid-2013.
Now let’s see. It’s currently the end of April in 2012, and Clearwire is hyping network plans that will not see the light of day until as late as June 2013.
I welcome your comments. Please send me an email at dmeyer@rcrwireless.com.
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