One of the most annoying facets of the current market in the U.S. for mobile telephones is that the carriers control the market in a self-serving way. They build closed systems to extract as high an economic rent as possible. You want to be a bookmark on the default WAP screen? That’ll cost you. Phones are sold at a huge discount to get you hooked on the service, and then “locked” to that carrier so they can’t be used elsewhere. I’m assuming that the iPhone will be no different, especially since Apple has shown a willingness to trade away freedom on previous consumer electronics products.
In theory, the lock is supposed to be temporary until the carrier has recouped their subsidy. In practice, I find that most carriers use it as a way to keep you hostage. When I was a Cingular subscriber five years ago, I was told that I had bought the GSM phone to use with the “Cingular service,” and it was Cingular policy never to unlock phones. I’m sure that the then-current world roaming rate of $4.99/minute had nothing to do with the policy.
The “control your customers and force feed them” model cuts against my entire experience, which is based on open systems and architectures. Innovation in entire handset business is constrained by the fact that the cell phone companies buy and promote the phones, not the manufacturers. Anything that does VoIP is a big threat to per-minute pricing, and therefore won’t be bought or actively promoted by the carrier.
With the carriers strangling new services and innovation in an attempt to ensure they are stillborn, there is one obvious way around it. If consumers were to purchase phones that were compatible with the carrier network, there is very little that a carrier can do about it. I had hoped that Apple would sell the iPhone directly to customers (in addition, perhaps, to the carrier channel). Apple is the one company that can build a product that people would head to the stores for, and perhaps shine a little bit of the light of open systems on to the mobile telephony world.
I’m not surprised Apple didn’t take on the telcos. They can still demonstrate their famous focus on usability by showing off the integrated voice mail system they developed with Cingular’s voice mail vendor. Using the carrier sales channel is going to move a lot more phones in the short-term, even though there is a much more diffuse long-term benefit of breaking the innovation choke-hold.
For the record, this is a bit of a wish on my part. I would love to have an iPhone, but Cingular’s mobile data plans ($79.99/month for unlimited) can’t touch the price of my T-Mobile plan ($30/month, for unlimited hot spot and EDGE). I can’t afford the service to move over to Cingular, but if the phone were made available in a non-locked model, I would be in the store on the first day with cash in hand. Fortunately for me, there is a true open mobile phone platform still to come.