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What's Keeping US Phones In the Stone Age?
knapper_tech writes "After seeing the iPhone introduction, I was totally confused by how much excitement it generated in the US. It offered no features I could see beyond my Casio W41CA's capabilities. I had a lot of apprehension towards the idea of a virtual keypad and the bare screen looked like a scratch magnet. Looks aren't enough. Finally, the price is ridiculous. The device is an order of magnitude more expensive than my now year-old Keitai even with a two-year contract. After returning to the US from Japan, I've come to realize the horrible truth behind iPhone's buzz. Over the year I was gone, US phones haven't really done anything. Providers push a minuscule lineup of uninspiring designs and then charge unbelievable prices for even basic things like text messages. I was greeted at every kiosk by more tired clamshells built to last until obsolescence, and money can't buy a replacement for my W41CA." Read on as this reader proposes and dismissed a number of possible explanations for the difference in cell-phone markets between the US and Japan. He concludes with, "It seems to me more like competition is non-existent and US providers are ramming yesteryear's designs down our throats while charging us an arm and a leg! Someone please give me some insight."
I finally broke down and got a $20 Virgin phone to at least get me connected until I get over my initial shock. In short, American phones suck, and iPhone is hopefully a wakeup call to US providers and customers. Why is the American phone situation so depressing?
Before I left for Japan about a year ago, I was using a Nokia 3160. It cost me $40 US and I had to sign a one year contract that Cingular later decided was a two-year contract. I was paying about $40 a month for service and had extra fees for SMS messages.
After I got to Kyoto, I quickly ended up at an AU shop and landed a Casio W41CA. It does email, music, pc web browsing, gps, fm radio, tv, phone-wallet, pictures (2megapixel), videos, calculator etc. I walked out of the store for less than ¥5000 (about $41) including activation fees, and I was only paying slightly over ¥4000 (about $33) per month. That included ¥3000 for a voice plan I rarely used and ¥1000 for effectively unlimited data (emails and internet).
Perhaps someone with more knowledge of the costs facing American mobile providers can explain the huge technology and cost gap between the US and Japan. Why are we paying so much for such basic features?
At first, I thought maybe it was something to do with network infrastructure. The US is a huge land area and Japan is very tiny. However, Japan would have lots of towers because of the terrain. Imagine something like Colorado covered in metropolitan area. Also, even though places like rural New Mexico exist, nobody has an obligation to cover them, and from the look of coverage maps, no providers do. Operating a US network that reaches 40% of the nation's population requires nowhere near reaching 40% of the land area. The coverage explanation alone isn't enough.
Another possibility was the notion that because Americans keep their phones until they break, phone companies don't focus much on selling cutting edge phones and won't dare ship a spin-chassis to Oklahoma. However, with the contract life longer, the cost of the phone could be spread out over a longer period. If Americans like phones that are built to last and then let them last, the phones should be really cheap. From my perspective, they are ridiculously priced, so this argument also fails.
The next explanation I turned to is that people in the US tend to want winners. We like one ring to rule them all and one phone to establish all of what is good in phone fashion for the next three years. However, Motorola's sales are sagging as the population got tired of dime-a-dozen RAZR's and subsequent knockoffs. Apparently, we have more fashion sense or at least desire for individuality than to keep buying hundreds of millions of the same design. Arguing that the US market tends to gravitate to one phone and then champion it is not making Motorola money.
At last I started to wonder if it was because Americans buy less phones as a whole, making the cost of marketing as many different models as the Japanese prohibitive. However, with something like three times the population, the US should be more than enough market for all the glittery treasures of Akiba. What is the problem?
I'm out of leads at this point. It's not like the FCC is charging Cingular and Verizon billions of dollars per year and the costs are getting passed on to the consumer. Japanese don't have genetically superior cellphone taste. I remember that there was talk of how fierce mobile competition was and how it was hurting mobile providers' earnings. However, if Japanese companies can make money at those prices while selling those phones, what's the problem in the US? It seems to me more like competition is non-existent and US providers are ramming yesteryear's designs down our throats while charging us an arm and a leg! Someone please give me some insight.
I finally broke down and got a $20 Virgin phone to at least get me connected until I get over my initial shock. In short, American phones suck, and iPhone is hopefully a wakeup call to US providers and customers. Why is the American phone situation so depressing?
Before I left for Japan about a year ago, I was using a Nokia 3160. It cost me $40 US and I had to sign a one year contract that Cingular later decided was a two-year contract. I was paying about $40 a month for service and had extra fees for SMS messages.
After I got to Kyoto, I quickly ended up at an AU shop and landed a Casio W41CA. It does email, music, pc web browsing, gps, fm radio, tv, phone-wallet, pictures (2megapixel), videos, calculator etc. I walked out of the store for less than ¥5000 (about $41) including activation fees, and I was only paying slightly over ¥4000 (about $33) per month. That included ¥3000 for a voice plan I rarely used and ¥1000 for effectively unlimited data (emails and internet).
Perhaps someone with more knowledge of the costs facing American mobile providers can explain the huge technology and cost gap between the US and Japan. Why are we paying so much for such basic features?
At first, I thought maybe it was something to do with network infrastructure. The US is a huge land area and Japan is very tiny. However, Japan would have lots of towers because of the terrain. Imagine something like Colorado covered in metropolitan area. Also, even though places like rural New Mexico exist, nobody has an obligation to cover them, and from the look of coverage maps, no providers do. Operating a US network that reaches 40% of the nation's population requires nowhere near reaching 40% of the land area. The coverage explanation alone isn't enough.
Another possibility was the notion that because Americans keep their phones until they break, phone companies don't focus much on selling cutting edge phones and won't dare ship a spin-chassis to Oklahoma. However, with the contract life longer, the cost of the phone could be spread out over a longer period. If Americans like phones that are built to last and then let them last, the phones should be really cheap. From my perspective, they are ridiculously priced, so this argument also fails.
The next explanation I turned to is that people in the US tend to want winners. We like one ring to rule them all and one phone to establish all of what is good in phone fashion for the next three years. However, Motorola's sales are sagging as the population got tired of dime-a-dozen RAZR's and subsequent knockoffs. Apparently, we have more fashion sense or at least desire for individuality than to keep buying hundreds of millions of the same design. Arguing that the US market tends to gravitate to one phone and then champion it is not making Motorola money.
At last I started to wonder if it was because Americans buy less phones as a whole, making the cost of marketing as many different models as the Japanese prohibitive. However, with something like three times the population, the US should be more than enough market for all the glittery treasures of Akiba. What is the problem?
I'm out of leads at this point. It's not like the FCC is charging Cingular and Verizon billions of dollars per year and the costs are getting passed on to the consumer. Japanese don't have genetically superior cellphone taste. I remember that there was talk of how fierce mobile competition was and how it was hurting mobile providers' earnings. However, if Japanese companies can make money at those prices while selling those phones, what's the problem in the US? It seems to me more like competition is non-existent and US providers are ramming yesteryear's designs down our throats while charging us an arm and a leg! Someone please give me some insight.
Q: What's Keeping US Phones In the Stone Age?
A: State of the "Free Market" in the USA
To answer your question, US consumers are keeping phones in the "stone age." The *vast* majority of US cell phone users buy the phones and use them as - get this - phones . Sure, teens love to text and techies love wireless... but most people use cell phones for their original, intended purpose. Manufacturers have seen this and responded accordingly.
It offered no features I could see beyond my Casio W41CA's capabilities.
.txt and .gif files like I've been able to do for 10 years already."
You're making the mistake of counting features, ignoring *how* they're used. I remember back in the early 1990s, when this new world wide web thing popped up. Plenty of comments then from people who couldn't see the forest for the trees, that were much like yours - "The world wide web offers no features I could see beyond downloading
Sure, the web can be seen as just text and image files, but oh boy... did the presentation and access difference ever change the world. How things work really is important.
I think you're missing the point. This isn't a rip on the iPhone, but on the American cell phone industry as a whole. There are many things lacking here.
If you've ever been overseas to a developed Asian country, you'll understand. If you haven't, I don't blame you for your shortsightedness.
He didn't say his phone was better than an iPhone, he said the features which are touted as new on the iPhone are not as novel or original when compared to the phones on the Japanese market.
In fact, I think his actual question was more like "Why are the features of the iPhone exciting, when the U.S. market should have been providing those or similar features already"
He doesn't dis the iPhone (other than implying it and all other U.S. phones cost too much).
In fact, his question is not low level enough. What he should be asking is why can't I buy a phone from any vendor, then a SIM card from a service provider, and plug it in and go?
Why do we in the U.S. have to even deal with ATT to get an iPhone? Why can't I just put a Verizon SIM card in my Nokia 3200? Why is the U.S., arguably the technology forerunner for a lot of the 20th century, falling so far behind so quickly? I mean, "No Child Left Behind" shouldn't have done that much damage yet!!
I think that what is happening is a stratification of economy. In the U.S. we have "evolved" past the customer is always right business model, and entered the age where a companies most important job is pleasing stockholders, not customers. Europe and Japan were quick to adopt (and improve) many of our technological advances in manufacturing, etc. over the past hundred years, I just hope they have the wisdom to avoid adopting our economic "advances" now.
"Proximity to wonder has blunted our perception and appreciation of it" --Tim Hartnell in 'Exploring ARTIFICIAL INTELLI
How can one phone save you 10-15 hours a week over another? What are you doing? Did you previously have no phone, so you had to drive across town several times a week to see if people were home to talk to?
Please stop and read your own posts before you write them. You're saying that american consumers "do not want more do-dads"? Are you certifiably insane? We'd attach a spork to a blender if we thought it would be beneficial.
No, we would attach a spork to a blender if we thought it would make us look cool.
We don't care if it is actually useful.
In fact, I think his actual question was more like "Why are the features of the iPhone exciting, when the U.S. market should have been providing those or similar features already" The features of the iPhone are *not* really exciting. I've been doing just about everything the iPhone does on my US market cellphones for years now. What makes the iPhone exciting is the IMPLEMENTATION. Browsing on my MDA, my Treo, or any one of the numerous devices I had in the past was a miserable experience at best. Browsing on the iPhone, even on EDGE, is 400000x better. That's just one example.
I don't think any meritorious argument for the iPhone is based on the feature list.
The phone service providers in the U.S. took this advance knowledge, and attached hefty fees to everything that was popular in Asia and Europe - text, ringtones, photo uploads. When these features were first rolled out in Japan, they didn't know what people would find popular. So every phone manufacturer and service provider took the shotgun approach and bundled as many of these features as they could for as low a flat fee as they could. This was unbridled competition. By the time they figured out what was popular, they couldn't jack up the price because everyone expected it to be a flat fee, and raising the price would send your customers to your competitors.
When the digital cell network rolled out in the U.S., the providers here knew text messaging, ringtones, and photo sharing would be huge. So they attached a per-item fee to them to maximize profit on it. Every one of them did it, nobody broke ranks and offered a flat fee service (at least not without an additional fee). Kind of an implicit agreement to collude to fix prices to maximize everyone's profit.
Americans simply don't know that these things are free or a flat fee in the rest of the world. For them, a text message has always been 10-15 cents each. A ringtone has always been $1-$2. The cost per each one isn't that much, so they pay it. The same thing happened the other way around with landline telephone service in the U.S. vs. Europe. Most Americans (whose phone industry was deregulated in the 80s) pay a flat fee for unlimited calls. Most Europeans (with nationalized phone monopolies) pay per phone call. That's just the way "it's always been" and people don't know to ask for more.
Normally the market would correct this situation with a new company offering these services for less money. But the cell phone service market requires you to own bandwidth, which was auctioned off back in the early 1990s. There's no way for a new company to join the market (which is why the upcoming auction of the 700 MHz spectrum is so important, yes the one Google has been making noise about).
Except companies like VZW intentionally cripple your phone so you can't do things no it without paying them. My Motorola E810 or whatever it is, has full bluetooth capabilities....if you don't buy it from Verizon. If you do buy it from Verizon, you can only connect a bluetooth headset, can't move files via bluetooth, and can't move files to and from the transSD slot either. Thankfully I was able to load a custom firmware and re-enable those features support. This is kind of similar to the iPhone not being capable of using a mp3 as its ringtone. I'm sorry, but the capability is there, its a fucking iPod. I'm sure att has some plan in the future to roll out some sort of ringtone buying plan.
You have the answer right there. The US market is not competing for the customers. They are more then happy to keep business as usual, and are not pushing the technology, just like their wired relatives. To them, there is no reason to roll out costly network upgrades to support the new technologies, because they control what technologies connect to their networks. This is unlike many other countries where the consumer decides what connects to the networks, the cell phone companies simply provide a SIM card that the user transfers to their different phones. Here the phones are locked down and stripped of their features. Look at Europe where many people own one phone but have several different "local" cell phone plans for the different areas where they frequently travel, they simply swap out the SIM card to use the other networks.
We were all warned a long time ago that MS products sucked, remember the Magic 8 Ball said, "Outlook not so good"