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Worst of the Week: ‘3’ is the mystical number

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 week reinforced to me that a real competition is not really real unless there are more than two involved. Sure, a boxing match is usually just between two combatants, and many sporting events take place between two teams, but I think we would all agree that a ring event is better when there are three or more involved and who wouldn’t want to see the carnage from a football game with three teams playing at once?

With this bit of knowledge and what has occurred this week in the wireless space, I have deduced that “3” is indeed the magic number.

This hit home during this week’s Competitive Carriers Association event in Las Vegas, where negativity was hurled at Verizon Wireless and AT&T Mobility, while at the same time there were repeated comments that the rest of the industry (competitive carriers, if you will) needed to band together to provide a formidable third option for consumers.

From a size perspective, this makes sense. Verizon Wireless and AT&T Mobility both have roughly 100 million customers, while CCA members, which include the likes of Sprint Nextel, T-Mobile USA, MetroPCS and Leap Wireless, also account for around 100 million customers. As I have stated before, I ain’t no math whiz, but those numbers seem to be darn near equal, and would seem to indicate that if all the stars were to somehow align, could represent a fair fight. I know that the chances of all those CCA members working together as a well-oiled machine like Verizon Wireless may be slim, but the opportunity is there. (I have obviously left AT&T Mobility out of the “well-oiled machine” comparison, for obvious reasons.)

From speaking with those at the CCA event, the competitive balance has a better chance of success at the regulatory level as opposed to the consumer level, but for many of those carrier members, regulatory hurdles can help improve the balance with consumers. Would it make sense for all the CCA members to realize the battle they are up against, band together and attempt to fight the “big 2” on more equal footing? Maybe, and at least that idea has been thrown around before.

If anything, that would really show if “3” is the magic number in the carrier space.

And it’s not just in the carrier space where it appears three are required to have real competition. Carriers from all corners seem to be screaming out for a third alternative in the smartphone space to appear, with Apple and Android at this point dominating the space. There are plenty of contenders that look able to provide such competition in Nokia/Microsoft and Research In Motion, but those two can’t seem to get out of their own way with a map. (I will leave the Apple pun here unsaid.)

Countless times, carrier execs have expressed a desire to have a third alternative in the market that is appealing to consumers and better yet cheap to procure. The hit carriers are having to take in subsidizing the iPhone is significant, though the amount of whining is a bit over the top as most of these carriers are requiring two-year contracts with those sales that help them recoup that investment before the first year is up.

Android has provided some respite from this, but the frantic pace in which new Android-powered devices and new OS nicknames are released seems to be making that space a bit hard for conservative carriers to control. And if carriers like one thing, it’s control. (If they like two things, it’s control and money.)

Nokia and partner Microsoft seem the most able from a “pieces” perspective to provide that third option for the industry, but darn it if they just can’t seem to put the square smartphone into the square cutout.

RIM, which showed a sign of life this week (if you can call losing “only” $235 million during a three-month period as life), is a bit more of a challenge as for some reason those enterprise-centric folks can’t seem to understand what it takes to build a touchscreen device or an OS that is less complex than DOS.

The drama both of these operations seem to be producing makes me yearn for a Palm resurrection. That company had all the basics nailed down tight. Awesome form factors and smooth operating system. Sure they couldn’t seem to get just that right sort of deal with a viable carrier partner, but for the most part Palm’s biggest challenge was that it was just short on funds, something that Nokia/Microsoft and RIM seem to have in spades.

Perhaps the answer is for a too-good-too-be-true partnership between all the parties involved to form some form of super-device maker that could provide a true third alternative in the market. Of course, the chances of that happening are about as good as a hundred wireless operators getting together to battle Verizon Wireless and AT&T Mobility.

I guess that just leaves “3” as not the magic number, but as the mythical number.

OK, enough of that.
Thanks for checking out this week’s Worst of the Week column. And now for some extras:

–Two Apple points today, which is also the day that a number of smaller operators are launching the latest iPhone 5 at price points undercutting larger rivals. (Who says smaller operators don’t wanna compete?)

First, Apple CEO Tim Cook posted an apology to the company’s devotees regarding issues with the company’s Maps program used in its new operating system. You may recall that in a bitter dispute reminiscent of children, Apple decided to forgo using Google’s wildly popular and developed mapping application in favor of its own, brand new and less developed mapping application. As is want to happen in such instances, Apple’s new mapping application has been derided by Apple opponents and even some fan boys.

In an attempt to make nice or something, Cook noted in the apology that Apple “fell short on this commitment” to provide the “best experience” possible to its users, and while it works on upgrading the offering customers can “try alternatives by downloading map apps from the App Store like Bing, MapQuest and Waze, or use Google or Nokia maps by going to their websites and creating an icon on your home screen to their web app.”

I know Apple does have some history in owning up to recent snafus in regard to its products, but this seems to be a bit oversensitive as it pertains to an application that for the most part works perfectly well and is offered to consumers at the low, low price of on-the-house.

–Second point on Apple. In published reports, Sharp, which makes the screens for the new iPhone 5, said it’s making “adequate volumes” of those screens to handle the device’s sales volume. You may recall that Apple said it had sold 5 million iPhone 5s during its initial sales weekend that included just a handful of carriers.

Not that adequate is not … well … adequate, but we are talking about the iPhone here folks. That term should never be used in any sort of connections with that device. Everything about the iPhone needs to be superlative or it should be considered a complete failure.

I welcome your comments. Please send me an email at dmeyer@rcrwireless.com.

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