January 10th, 2008

Apple Did Blow Up The Wireless Industry

by

The Untold Story: How the iPhone Blew Up the Wireless Industry is the title of a story Fred Vogelstein story in Wired. Back in June, I wrote How Apple Will Use The iPhone To Take Over The Wireless Industry:

Steve Jobs isn’t stupid. He knows that AT&T Wireless sucks. So why lock the revolutionary iPhone into a crappy network?

Because Jobs knows that everyone will buy an iPhone anyway, even if they hate the network. And that, as Umair points out, shifts all the power to Apple.

Apple will significantly improve the already revolutionary iPhone in subsequent generations, and lower the price, as they did with the iPod. With each new release, more and more people will look at Verizon and Sprint, who don’t carry the iPhone, and say, WTF!?

Fred writes:

The hosannas greeting the iPhone were so overwhelming it was easy to ignore its imperfections. The initial price of $599 was too high (it has been lowered to $399). The phone runs on AT&T’s poky EDGE network. Users can’t perform email searches or record video. The browser won’t run programs written in Java or Flash.

But none of that mattered. The iPhone cracked open the carrier-centric structure of the wireless industry and unlocked a host of benefits for consumers, developers, manufacturers — and potentially the carriers themselves.

and

Manufacturers, meanwhile, enjoy new bargaining power over the carriers they’ve done business with for decades. Carriers, who have seen AT&T eat into their customer bases, are scrambling to find a competitive device, and they appear willing to give up some authority to get it.

At the time, I was just speculating. Fred’s got the reporting to back it up. Nice to see the story told.

Comments (5 Responses so far)

  1. Indeed, Scott. It’s always good to be right and early: Here’s how we abstracted it on Brijit:

    With a few exceptions, Vogelstein avoids the oohing and aahing so familiar to legions of Apple fanboys. Instead, with energy and enthusiasm he weaves a story of secret meetings, slamming doors, and the mad rush to deliver a working iPhone, first for the folks at Cingular (now AT&T), then for public at the annual Apple love-fest, Macworld. “Untold” may be a stretch, but Vogelstein’s conclusion that Steve Jobs “has given all the power to consumers, developers, and manufacturers,” and that the carriers will benefit as people “spend more time on devices … racking up bigger bills,” is pretty compelling.

  2. [...] How Apple Will Use The iPhone To Take Over The Wireless Industry, and the follow-up, Apple Did Blow Up The Wireless Industry [...]

  3. [...] this mean Apple has taken over the wireless industry now as Scott Carp suggested?  There’s just one little problem with that theory:  now Jobs himself faces the spectre of [...]

  4. Isn’t the next wave of this going to Linux Open Source phones? There’s nothing special about the iPhone, its just a good interface. Now that Apple has shown an example, the Linux code is mature, and the hardware pieces are commodified, isn’t entry into the phone biz just a matter of packaging and design? If Apple limits itself to one carrier, doesn’t that leave the rest of the world wide open?

    Jawfish

  5. As long as it’s not got 3G and it’s not for sale in the majority of european countries, it will not take off in Europe. Open it up to the whole of Europe WITH 3G capability and boom. You will see iPhone sales in Europe out perform iPhone sales in the US. I bet you that!

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