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.'"

Comments

On a general level...

[daddyrief]

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

Re:On a general level...

[mp3phish]

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.

Re:On a general level...

[Jah-Wren Ryel]

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.

Re:On a general level...

[tbone1]

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.

Re:Reality Disortion Field spreading

[avalys]

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.

Looking forward to no more crappy software

[LinuxInDallas]

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.

Re:Steve Jobs is WRONG!

[0xdeadbeef]

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.

Re:Steve Jobs is WRONG!

[ozmanjusri]

One word: Monopoly.

A better word: Cartel.

Understand the term

[SuperKendall]

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.