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How Jobs Played Hardball In iPhone Birth

Carl Bialik from WSJ writes "Apple bucked the rules of the cellphone industry when creating the iPhone by wresting control away from normally powerful wireless carriers, the Wall Street Journal reports. From the article: 'Only three executives at the carrier, which is now the wireless unit of AT&T Inc., got to see the iPhone before it was announced. Cingular agreed to leave its brand off the body of the phone. Upsetting some Cingular insiders, it also abandoned its usual insistence that phone makers carry its software for Web surfing, ringtones and other services... Mr. Jobs once referred to telecom operators as "orifices" that other companies, including phone makers, must go through to reach consumers. While meeting with Cingular and other wireless operators he often reminded them of his view, dismissing them as commodities and telling them that they would never understand the Web and entertainment industry the way Apple did, a person familiar with the talks says.'"

24 of 479 comments (clear)

  1. On a general level... by daddyrief · · Score: 5, Interesting

    I'm really for anything that helps wrestle proprietary control settings away from the major carriers.

    --
    "Banking establishments are more dangerous than standing armies." -Thomas Jefferson
    1. Re:On a general level... by mp3phish · · Score: 5, Interesting

      While I normally do not like to praise Apple, this is one thing I commend them on. With all the proprietary gimmicks Apple tries to shove down customer's throats, they are not as bad as the gimmicky trash shoved down wireless carrier's throats. For this reason, I have to take Apple's side on this.

      The wireless carriers in the US (and a few other regions) have been gouging the eyes out of customers simply because they have always been considered a premium service, thanks to the federal subsidy known as the universal service fund on landline phones. While the rest of the world commoditized their wireless telephone markets, the US wireless carriers turned them into crap shoot proprietary bullshit.

      The iPhone (though I refuse to admit it is a good deal, or worth anything close to $500) is the first step in finally commoditizing wireless telephone service. Not allowing the carriers to screw up the phone's firmware is what companies like Nokia and Motorola should have done a decade ago. It is no wonder the wireless carriers are doing what they do, look at how easilly the FCC allowed SBC to buy out AT&T Wireless and then buy out AT&T long distance all in a 3 year period, consolidating almost every drop of the original baby bells.

      Thank you Apple for your willingness to play Hardball. I am glad you can see through the corporate crap that is Cingular/AT&T/SBC. My only hope is that you can take the same approach to your own business model and look at yourself from an outsider's perspective, just as you have approached this problem with Cingular.

      --
      Your ignorance is infinitely greater than you realize.
    2. Re:On a general level... by Jah-Wren+Ryel · · Score: 4, Interesting

      I have to confess that I'm really only concerned with that point of view and don't really care all that much about whether the mobile phone industry is "opened up" in some fashion or another. As long as the service provided is acceptable (it is) at a price I feel is not out of line (it isn't) then that about covers it for me.

      Do you realize that's the exact same attitude a majority of Americans had about AT&T before the break-up? When long-distance calls were easily over a dollar a minute and it was illegal to connect a non-telco handset to the phone-line in your house?

      Your perception of what is "acceptable service" and a reasonable price is shaped by the status quo and, pretty much by definition, the status quo favors the entrenched businesses and systems.
      --
      When information is power, privacy is freedom.
    3. Re:On a general level... by Hal_Porter · · Score: 2, Interesting

      But what about people that only want to use free and open source software? How are they supposed to play DirectX games? Unless Microsoft are forced to document their APIs in a manner acceptable to the Free Software movement (i.e. no fees or NDAs), how are other OSs supposed to implement them?

      --
      echo -e 'global _start\n _start:\n mov eax, 2\n int 80h\n jmp _start' > a.asm; nasm a.asm -f elf; ld a.o -o a;
    4. Re:On a general level... by Lars+T. · · Score: 3, Interesting

      Please read my comment.

      I didn't say Apple should license fairplay, I implied that Apple is not above using proprietary tools to lock out competitors (just like the cell phone companies).
      Lock out of what exactly? Out of selling music online? Out of making a Mobile Music Player?
      --

      Lars T.

      To the guy who modded me down from perfect to terrible Karma - Apple haters still suck

    5. Re:On a general level... by tbone1 · · Score: 4, Interesting
      no they should both have to license them out.

      You gave no good reason for this. Well, you would like to do it, but that doesn't make it right. I would like to punch politicians in the face and hit baseballs through the windows at CNN headquarters, but that doesn't make it right.

      Forcing them to license their product is a violation of their property rights, which is a slippery slope. It also creates more government interference and regulation, which is the last thing we need.

      --

      The Independent: Reverend Spooner Arrested in Friar Tuck Incident - ISIHAC, Historical Headlines
    6. Re:On a general level... by mstone · · Score: 2, Interesting

      Fallback capacity?

      I work as a supervisor, and don't want to tell you how many people I've seen come in late for work, saying, 'I would have called in to let you know, but my phone was dead and I couldn't remember the number." There's no reason for that to be a lie.. there's no penalty for calling in, but two no-call/no-shows will get you fired. It's common enough that I've taken to handing out laminated cards with all our division's phone numbers.

      I also see about one person every two or three months who's lost their cell phone, or had one die in a way that makes it impossible for them to recover their numbers. You can tell them by the thousand-yard stare, as they cope with the idea of trying to get all those numbers back.

      Yeah, there are significant benefits to storing information in the world rather than in your head. But information stored in your head has the benefit of being available to you any time, anywhere.

    7. Re:On a general level... by Overly+Critical+Guy · · Score: 3, Interesting

      My point was that if Apple has to license FairPlay, then Microsoft should have to license Win32. Nobody would have to reverse-engineer anything.

      --
      "Sufferin' succotash."
  2. Apple wants to screw us instead by _merlin · · Score: 1, Interesting

    I'm a Mac user, and I'll say it straight up: Apple only wants to stop the carriers from screwing customers with the iPhone so that Apple can screw customers harder with it instead. So it doesn't have AT&T ringtone, messaging, and pr0n software. You're locked in with Apple software instead. They've already confirmed that you can't install your own apps. The phones are network locked, too, so I don't see how they're stopping the carriers from screwing customers, anyway.

    A carrier doesn't screw you too badly. I have a Hutch3 branded Nokia 6280. It was a lot cheaper than the unbranded version. It's network locked and has branded firmware and has a Hutch3 logo on the case. However, it can be unlocked and have the firmware replaced. Hutch3 will do this for me for free one year after I bought the phone. Also, I can install any Java MIDP application I write or download.

    The iPhone will be a joke until:

    • You can install your own apps on it
    • It supports UMTS/HSDPA 3G
    • It supports live video calls
    • It supports MMS
  3. Re:Reality Disortion Field spreading by Tablizer · · Score: 2, Interesting

    Obviously, we'll all have to wait until it's released to see what it's like. Apple are the masters of the UI, and most phones/smartphones I've had have really lousy UI.

    I'll second that motion. The most common features I need are gazillion menus down in my Motorola phone. People keep talking about how iphone "lacks features", but feature O.D. is a Microsoft trait, not an Apple one. If you want quantities of features, regardless of how easy it is to use them, then Apple products are probably not for you.

  4. Re:Reality Disortion Field spreading by avalys · · Score: 5, Interesting

    Have you ever heard of something called a 'user interface'? Apple knows how to build a good one, and Motorola, LG, Nokia, and the rest of them do not.

    That is what will sell the iPhone. For every geek who looks at the iPhone and says "Bah! My free-as-in-speech, open-source, ugly orange phone with the stupid name (OpenMoko) will do all that and more! The iPhone is crap!", there will be 100 normal users who try it out and say "Goddamn, this phone is so much easier to use than the POS I have now. I'm buying one."

    I am by no means technically illiterate - I'm a computer science major at MIT. But I have long since lost my patience for fighting with badly-designed, badly-engineered, badly-implemented consumer electronics. I will be buying an iPhone when it comes out, because like all of Apple's recent products, it will 'Just Work'.

    It will be a hybrid iPod/cell phone/PDA with no sacrifices in functionality, compared to carrying around three separate devices. As Jobs mentioned in his keynote, the price is still cheaper than buying a smartphone and iPod Nano separately.

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    This space intentionally left blank.
  5. Re:Reality Disortion Field spreading by je+ne+sais+quoi · · Score: 2, Interesting

    Yeah I agree, I'm on my third motorola flip-top and while each new version does get slimmer and smaller, it seems there's always compromises. E.g., on my newest one, its too easy for the quick buttons on the side to change the ringer type while the phone is in my pocket. Not to mention the fact that T-mobile puts their "download ringtones" links first in the sounds menu and there's no way to delete them... It annoys me because the phone has bluetooth so I just upload my own mp3s; I'm not buy any of their crap.

    If anybody can fix the UI disaster, its Apple. Sure it won't be perfect, but my guess is that it will be an improvement (if you want to pay for it). This whole situation reminds me of the way Apple dealt with the music companies, and we all know the DRM is a mixed bag, but it sure beats the competition for most people.

    Strangely enough, I'm a bit proponent of the "do one thing and do it well philosophy", but after seeing the keynote, I am impressed. A good UI makes the extra features useful, a bad one makes them annoying.

    --
    Gentlemen! You can't fight in here, this is the war room!
  6. Looking forward to no more crappy software by LinuxInDallas · · Score: 4, Interesting

    I am looking forward to trying the iPhone. In particular I'm looking formward to being free of the god-awful software that comes with most phones.

    Just this weekend I decided to check an ebay auction on my samsung phone. I noticed that Sprint offers a "ebay premium" program for download. Guess what? It's FIVE dollars a month. WHAT? I already pay for internet access on my phone, why should I pay another dime to get a better view of my ebay account? If the phones came with capable browsers then this nickel and diming wouldn't be possible because the phone would have desktop-similar browsing capability. I think the iPhone is going to go a long way to helping consumers.

  7. Re:Steve Jobs is WRONG! by 0xdeadbeef · · Score: 4, Interesting

    Most people are of average or lesser intelligence. Most people make far less than the median income. Hell, most people live and die within walking distance of where they were born. But even in third world ghettos, cell phone usage is exploding.

    Your Ludditism and lack of influence are no basis for generalizations about the needs of people who buy cell phones.

  8. Re:Ignores carrier upgrades by squiggleslash · · Score: 2, Interesting

    And then Apple would not be able to provide features like visual voice mail which require changes to the carrier network.

    Of course Apple can support it on an unlocked phone.

    Believe it or not, there are many de-facto standards in the mobile phone industry. One of the most famous is the voice mail icon. GSM doesn't really standardize it. There are multiple ways to implement it. Most cellphones support most ways of implementing the VM icon. On some, if you buy an unlocked phone, you have to configure a hack or two to get it to work with some networks (I had to use a SEEM editor with my Motorola V635 to get voicemail icons working on T-Mobile USA.)

    Making an unlocked phone doesn't mean being forced to limit yourself to the documented features of GSM. You can implement whatever the hell you want, and let the carriers decide what they're going to implement.

    I'm fed up of hearing this bullshit argument. As if "Visual Voicemail" is worth the pain of locked phones in the first place. I'm not seeing how it's so "must have" that I'd be willing to buy a phone for $500 I'd have to throw away when I switch carrier.

    --
    You are not alone. This is not normal. None of this is normal.
  9. Re:Reality Disortion Field spreading by avalys · · Score: 2, Interesting

    "You also seem to have left out Windows Mobile in your list of companies that you seem to think don't know how to make a user interface. People can hate Windows concepts and MS, sure, but MS spends a lot of money with real people to ensure their crap is easy to use."

    That's why Vista's UI is so great, right? I've seen it on several machines now, and it's a freaking mess.

    "It is people like you that forget the rest of us have been using Windows Mobile and even Motorola 'user interfaces' on our phones for SEVERAL years, playing our music, using our bluetooth, playing our movies, and also accessing the internet at near DSL speeds, with the latter being something the iPhone can't even do."

    Did you completely miss my point? I realize that these things are all technically possible on Windows Mobile and Motorola devices - the point is that the interfaces are lousy. I guess it's a matter of opinion - but I know a lot of people share mine.

    "If Apple is the God of user interfaces, then why do they continue to copy good ideas and try to promote them as their own, you know like the iPod?"
    Again, you're missing the point. What did the iPod copy, other than the idea of an MP3 player? The iPod was a success because of the user interface, and solid design that felt good in your hand. People like to whine about the marketing and 'cool' factor, but the iPod was popular long before the ads, and long before it became a fashion accessory, because of how good the UI was.

    "
    If Apple is the God of user interfaces and that is what you see as them doing well, why don't they actually create a new user interface paradigm, yet the new concepts for UI come from the OSS world and even MS. Remember this the next time you drag and drop text in a document, MS did it first."

    So, that's the best Microsoft UI innovation you could think of?

    And you don't think that the iPhone represents a new user-interface paradigm, with the multi-touch screen and all?

    "Take the Menu bar, and how many users just don't get the 'multi-application' usage concept because the flipping bar confuses them, so they close and flip between applications."
    Ever heard of Fitt's Law? There's a very good reason for putting the menu bar at the top of the screen - it makes it much easier to 'hit' the menus with your mouse, because the mouse stops at the top of the screen. Compare this to windows, where you have to hit a target of about 20 pixels or so to select a menu. I suppose it might not be completely intuitive, but in the long term it is a much better solution.

    "If you are a CS major at MIT, then my faith in the next generation has been destroyed."
    I'm crushed.

    --
    This space intentionally left blank.
  10. Re:Steve Jobs is WRONG! by ozmanjusri · · Score: 4, Interesting
    One word: Monopoly.

    A better word: Cartel.

    --
    "I've got more toys than Teruhisa Kitahara."
  11. Re:Ignores carrier upgrades by SeaFox · · Score: 2, Interesting

    if Apple meant it, the phones would be 100% unbranded and unlocked, they'd take any GSM provider's card....

    And then Apple would not be able to provide features like visual voice mail which require changes to the carrier network.

    Are there any other features that require Cingular on the iPhone? I hate to think we're justifying the decision to lock the iPhone on a single feature most people could care less about.

    What Apple gets by partnering is concessions in network development they would never get if they stood along against all other phone companies. That is the value that Apple brings to the table, making complex things easier and stuff like network improvements to handle random access voice mail are part and parcel of that.

    Voicemail is a very small part of the phone user's experience. The interface itself is a far larger one, and Apple went a long way for that by not letting Cingular add some garish orange and blue logoed interface to their phone. I have an unlocked Cingular phone I'm using on another network, and I've talked to my carrier and it seems there is no way to reload the phone with a generic or even T-Mobile branded version of the interface. I'll always have "Jack" bid me goodbye when I switch off my phone, as well as have "Cingular marketplace" ect icons that do nothing on my menus.

    If the iPhone were just like any other MVNO phone, it would lose a lot of potential for true innovation in phone development.

    The iPhone doesn't have to be part of a MVNO-initiative by Apple, they should just be selling it as a phone you plug your own SIM into. Ringtones, ect can be downloaded from Apple or anywhere else like people do now.
  12. Understand the term by SuperKendall · · Score: 4, Interesting

    Believe it or not, there are many de-facto standards in the mobile phone industry. One of the most famous is the voice mail icon.

    Your whole rant makes it apparent you don't understand what visual voice mail is. It's not iBiff. It's, well, voicemail that is visual - as in, you get to see a list of all voice mails you have currently waiting, and then you can choose to listen to any one you like, in any order.

    Now of course this is not a new thing to phones, IP phones in particualr. But the cell phone industry? They support nothing like it today. To actually be able to randomly access voice mail is, in 2006, apparently a startling concept to cell phone network providers.

    Making an unlocked phone doesn't mean being forced to limit yourself to the documented features of GSM. You can implement whatever the hell you want, and let the carriers decide what they're going to implement.

    And the carriers can laugh at you, and the feature is useless. Apple cannot realistically build a phone, and then release it "hoping" that all (or any) of the ideas they have get implemented. They have to make a polished device first, so that people wll actually want to buy one. If they did not the cell industry would seek to kill it fearing Apple would gain too much power. Far easier to play to the greed of a single carrier and get them to do what is needed.

    The Linux phone is basically taking the path you advocate. But I really do not think it would ever be in a position to dictate new network features the way Apple currently is by basically taking hold of a carrier and shaking some sense into a very stagnant industry who really doesn't understand device development. I say that as a user of various cell phones for years, which are uniformly horrible in day to day use. The Linux phone would eventually be better but it would always be limited in potential by what the carriers allowed. I am thinking the Linux phone will eventually be able to make use of the same features that are being added for the iPhone.

    Also Apple is not just supporting visual voice mail, but also push email from Yahoo and perhaps other things we have not heard of yet. Allowing Apple to help design user-oriented improvements to the network is something that eventually will improve all phones, not just the iPhone.

    --
    "There is more worth loving than we have strength to love." - Brian Jay Stanley
  13. They said you can buy apps by SuperKendall · · Score: 2, Interesting

    Jobs himself said, shortly after the iPhone launch, that you can buy applications for the iPhone - they will just be tightly controlled by Apple, probably similar to the games for the iPod today (and there is speculation games on the iPod were actually a was to test delivery of software via iTunes which is how the iPhone is updated as well).

    Frankly I also think users will be able to move Dashcode creations onto the iPhone, I would be very surprised if that was not the case. For me that eliminates a lot of the need for custom applications.

    --
    "There is more worth loving than we have strength to love." - Brian Jay Stanley
  14. My Dream Cell Phone... by RexRhino · · Score: 2, Interesting

    It would have 12 buttons, and make phone calls... and would be waterproof, have a huge freakin battery, and survive a fall from a low flying airplane. Why are no companies making the kind of cell phone I want? No MP3 player, no alarm clock, no text messaging, but broadcast a signal strong enough to stop your grandpa's pace maker, and heavy enough to be used as a meelee weapon in a bar fight!

    I want the civilian version of this:
    http://home.att.net/~wd0giv/Phones/ta838.jpg

  15. Re:Oh, sounds great... by DustyDervish · · Score: 3, Interesting

    Huh? Since when have we had an operating system with that type of functionality in that size of a package? The iPhone is NOT a cell phone. It is an operating system that includes cellular networks as a source for its network data requirements. The iPhone will host the first OS that places a brilliant interface on just another input/output stream called voice data. It's radical because Apple actually seems to be placing hardware innovation first. Your right, this tech has been around for years. Why is it that no tech company until now has bothered to try and do it right? They just do it well enough to get you to fork over your hard earned cash. Because of this we've spent the last few years with no innovation whatsoever. When companies place profit first and become monopolistic, they don't have to make anything better because they have already latched their parasitic teeth into your wallet. Now that Apple is in the game, they will HAVE to make their products better and cheaper, or Apple will put them out of business. Intel sat on it's ass until AMD started whipping them, now that they've seen the writing on the wall, we are back to getting some of the best processors ever out of them. The same thing will now happen to the cell phone business. If they don't get off their collective butts, Apple will run off with their cash cow. Just like the record companies, the cell networks are relics. It's about time somebody started taking advantage of, and making a profit out of, these outdated modes of business. Good for Apple. Good for us. Long live the new flesh.

  16. Expandible vs. usable by SuperKendall · · Score: 2, Interesting

    Yes phones today come with lots of expansion capability - that only the most technical users make use of.

    They also can sync via USB or even bluetooth to computers. Yet people hardly sync anything over this connection. The more advanced among us actually make use of address books and contact lists.

    But wouldn't it be great if many more people could make use of a lot of storage and computer syncing through an interface they use today? iTunes phone syncing means that a lot more people will be able to access features that really only the most technically inclined people use today.

    Now here's the real aspect of the phone that will propel popularity, yet is hardly mentioned - the dock. In a world rife with iPod friendly accessories, no one feature of the iPhone is quite as immediatleey useful as the standard iPod dock connector it sports. It will be able to charge in the car with chargers people already own. If that isn't a first for amobile phone, I don't know what is.

    --
    "There is more worth loving than we have strength to love." - Brian Jay Stanley
  17. I wasn't clear enough, I guess by oohshiny · · Score: 2, Interesting

    Did you actually understand the gist of the article, how difficult it is to get through the "orifices" to get to the customers? The carriers are (except Cingular when it came to Jobs apparently) in total control of the delivery system, and can demand anything they want from phone manufacturers.

    Sorry, I wasn't clear enough. My point is that these assertions are total bullshit. I've been using unlocked phones on Cingular for many years, and I am using three different unlocked, fully programmable phones right now. Not only do they work on Cingular, they also work in other countries on other carriers with other SIM cards when I travel. And I can (and do) load many different applications on them. And when you buy a locked Cingular phone, you can easily have it unlocked.

    I think Verizon and Sprint try to exercise more control, but it's not right to lump Cingular in there.

    So, Jobs didn't free users from carrier control, he is trying to establish control over users, with a totally overpriced and feature-deprived phone.

    Well golly gee willikers, don't buy one then!

    I won't. And I'm trying to convince others not to buy the iPhone either, since I think Apple's behavior should be discouraged and punished by the market. Once they come out with an unlocked, programmable iPhone, then it's maybe worth looking at it again.