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Making Sense of the Cellphone Landscape
Charlie Stross has a blog post up that tries to make sense of the mobile phone market and where it's going: where Apple, Google, and the cellcos fit in, and what the point of Google's Nexus One may be. "Becoming a pure bandwidth provider is every cellco's nightmare: it levels the playing field and puts them in direct competition with their peers, a competition that can only be won by throwing huge amounts of capital infrastructure at their backbone network. So for the past five years or more, they've been doing their best not to get dragged into a game of beggar-my-neighbor, by expedients such as exclusive handset deals... [Google intends] to turn 3G data service (and subsequently, LTE) into a commodity, like Wi-Fi hotspot service only more widespread and cheaper to get at. They want to get consumers to buy unlocked SIM-free handsets and pick cheap data SIMs. They'd love to move everyone to cheap data SIMs rather than the hideously convoluted legacy voice stacks maintained by the telcos; then they could piggyback Google Voice on it, and ultimately do the Google thing to all your voice messages as well as your email and web access. (This is, needless to say, going to bring them into conflict with Apple. ... Apple are an implicit threat to Google because Google can't slap their ads all over [the App and iTunes stores]. So it's going to end in handbags at dawn... eventually.)"
Picked up an N900. T-Mobile unlimited for 10 bucks a month. Could probably get away without it anyway, since there's so many open hotspots around in NY. I hate AT&T. Hate Verizon. Probably hate T-Mobile in a month. :-) There's no way I want to pay 80-120 bucks a month though. Ridiculous.
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Pretty soon, we'll be buying phones with data plans and the voice plan will be optional (if needed at all).
All we need is Google to get their phones coming with a VOIP client as standard. Big unique selling point that no matter what network, or if you're not even on a network but just have wireless at home/work/in car/train/plane, you can make/receive calls.
Using phone numbers and keeping a local phonebook of addresses makes as much sense as using IP numbers in a browser to get to a website. Google providing their DNS to allow new services to be added like this was another one of the steps needed to be done. Google Voice is a stopgap, their newly acquisitioned VOIP stuff is the next step.
Shortly, it'll be standard to call someone using an email address and the data-networks will route as needed to their phone/home/business.
Waiting for an amusing sig.
Here's one reason for the Nexus One that I haven't seen yet.
Google wants it's employees to use Android and test new versions and be inspired to come up with interesting applications. The best way to do this is to give all your employees phones. If you're doing that, you might as well come up with a cool phone. It's not like Google doesn't have the money to do this.
So, no, there's no ulterior motive about breaking the cellphone companies' grip on the market. There's no plan to sell it through T-Mobile, AT&T, Verizon, or even Mosaic telecom. All there is a phone that Google can give to their employees for testing and being creative with. That's it.
I know, I know. It's far more fun to believe that these corporations are doing all of these things as a battle that we can sit back and enjoy. But the reality is usually far more mundane.
Scary or neat?? that is the question. here's a thought, what if they (cel/tel cos) are already packet switching and making people pay for circuit switching?
It's too hard due to the land size.
Whereas in Europe or the Middle East, you can establish a network with 100% population coverage quite easily, the same size network in Australia wouldn't cover a single state.
Same goes for broadband networks. It's too hard which is why nobody has ever really competed with Telstra.
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I thought of this also when I was reading TFA. The Internet tears down all garden walls, AOL is only the most obvious example.
The Internet tore down the walled garden of every BBS that ever existed, and the operators were glad of it for the most part.
It's tearing down the MAFIAA's walled garden of distribution. Movie studios dislike NetFlix and they hate Red Box. The music cartel really doesn't like iTunes, but they tolerate it because they get a cut. And they all despise The Pirate Bay, et al.
The Internet is tearing down Microsoft's walled garden of software (which is what they mean when they say "ecosystem"). Don't like Windows? Go download any of a handful of BSD's or several dozen Linux distros. And you get the opportunity to make better whichever you choose.
(Which is why I laugh every time I see a Win7 commercial... MS is actually touting the fact that Win7 wasn't their idea. Now, about that monolithic kernel...)
You know, if I were the paranoid type, I might be prone to think there were some high level shenanigans going on.
Remember the Apple patent enforcing ad viewing or the Apple patent on OS advertising?
Google is known for its advertising business, and has been putting ads everywhere. Eric Schmidt was on Apple's board from 2006 to 2009, when he resigned (or was forced out?) due to Google's entering "more of Apple's core business" with Chrome and Android. The new, unlocked, Google phone has plenty of speculation surrounding it, but one of the more interesting bits was that it could show up in two forms: (1) expensive, not subsidized, and (2) cheap, with advertising subsidizing it somehow, perhaps forced ad viewing or something?
Given Schmidt's time on the board, I wonder if he deliberately or inadvertently revealed any of these plans, or if Apple found itself aware of these plans through some other means. Regardless, if Apple has a patent on OS-level ad displays and/or forced ad viewing on a device, it would seem that they would be in a position to try and extract money from Google if they go forward with an ad-subsidized phone.
So now this begs the questions: Was Apple's patents on these concepts the result of information about Google's upcoming plans (either acquired legitimately or otherwise), or were they plans they had for a device of their own? Tough to say.
Personally I'm all for the carriers to be reduced to a conduit provider only. It's about time too. If they all had to compete as nearly identical providers of bandwidth instead of a myriad of services, then perhaps we'd see some improvements in the network quality. In fact, they'd have a lot more network capacity if they'd deliver one type of service instead of fragmenting it between different technologies. A friend and I often lament the poor audio quality people have come to expect from wrieless phones now that we are 100% digital. Sure there's no more "static" - but audio quality has suffered to get there.
I'm hopeful LTE will improve things - though I'm not holding my breath for it. It's going to be an expensive network upgrade that won't happen overnight. Sprint is banking on wimax and outsourcing their network, Verizon is claiming latter half 2010 for LTE. And along the way comes Google's Android and the exclusivity of the iPhone on AT&T nearing expiration (was it renewed? last I read it was all talk but I didn't see anything come from it), perhaps we'll finally have some heavy hitters that can break the carrier strangleholds. Should be interesting if they can.
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Not really. Apple's relationship with the music industry (and, to a large extent, their handling of iPhone apps) is more like Volvo's relationship to the petroleum industry... if the entire petroleum industry had failed, in spectacular fashion, to come up with a workable means of delivering gasoline to consumers, had spent half a decade suing anyone who tried to deliver gasoline to consumers, and then Volvo had stepped in and opened the Volvo Gas Store. Apple started selling music online because the RIAA wouldn't, not because they wanted to compete with music retailers - although it certainly didn't hurt that the music industry morons accidentally gave Apple enough pricing power to made 99-cent tracks the new sales model.
In other words, Apple is in the business of selling hardware; the music is just a commodity to them, and their only purpose in selling it is to drive more sales of Apple hardware. On the internet bandwidth is already a pure commodity, and Apple's music store is no danger of fading into oblivion: If anything the opposite is true and Apple is dominating online music sales, again thanks to the music industry morons who gave Apple an insurmountable lead (and made the even dumber mistake of allowing DRM that locked the music to the Apple hardware, but that's another story).
It's also telling that iPhone apps quickly raced to the bottom of the pricing scale: If a 99-cent app delivers more than a dollar's worth of value to the customer, then the app has effectively added value to the phone, and Apple pockets the difference in increased hardware sales. If AT&T Wireless became a pure-bandwidth provider, the only thing Apple would do is to stop turning away apps AT&T doesn't like - Skype, Google Voice, Slingbox, etc. - and let those apps add value to the phone as well.
The only thing that might endanger Apple's walled-garden approach to selling iPhone apps would be a competitor with a wide-open app store that attracted more developers, led to more interesting apps, and threatened to reduce the value that third-party apps currently deliver to the iPhone. The Nexus One is a signal that Google wants to go there (and, in passing, that Verizon and other carriers will fight tooth and nail to prevent opening their networks), but the most likely outcome here is pressure on Apple to make their app rejection policies more transparent and developer-friendly.
So I don't think there's a scenario where Apple's music and app stores fade into oblivion, even if wireless bandwidth becomes a commodity - again, bandwidth is already a commodity on the wired internet, and both the music store and the iPod Touch are thriving.
Google really needs to rip off Apt and Synaptics and make a version for their phones. All the way. Not only do they need to make multiple version specific repositories (and tested, don't let Debian and its ability to break stable regularly set to much of an example). The ability of users to add custom repositories for our apps that Google wont stamp with approval would be nice as well. We really need the carriers and their inability to do anything but lump surcharges on top of crap out of the way.
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Hear hear. I was thinking - an article written as if Apple and Google are the only phone companies? And believes the myth that the Iphone is a "runaway hit"? (Actual market share figures disagree.)
TFA only mentions Symbian briefly, dismissing them as you say, on the grounds that they are losing share. Well yes - at 40% market share, I'd expect over time that to lower as other companies enter. That doesn't mean Apple are remotely near overtaking them. And anyhow, even if they want to focus on the newcomers - where on earth are RIM/Blackberry, who are also ahead of Apple?
It talks about "Version 1" of 3G - but my old 3G feature phone from 2005 had full unrestricted access to the Internet (including tethering). I do agree that ultimately, phone companies need to transform themselves into mobile Internet providors, but it's clear that we're heading in that direction anyway, and I don't see why Apple are so special in this. Indeed, I hope Apple don't play a strong part of this - if they become dominant, then our 2019 mobile Internet, even if it's an open Internet, will only be available on a locked down platform where all software needs Apple approval to run. How is that an improvement?
I agree it doesn't make sense to always restricting the market to only smartphones. It's not just that they're a minority of the market, but it's also so ill-defined. Anyone: why was my old 3G phone that could do Internet and run any applications a non-smartphone, yet Apple's original Iphone, which didn't have 3G, can only run Apple-approved applications, and didn't even support basic features like copy/paste, considered a smartphone? More generally, give me a definition that includes the Iphone, but doesn't include most "feature" phones?
It's not just Nokia - Samsung, LG, Motorola are all companies that have bigger market share, yet you hardly ever hear about them.