Apple's iPhone "wrecking" the cell industry - Page 2

Analyst Craig Moffett of Bernstein Research is living in a time long since past when monopolies like the "Death Star" were allowed to do anything they pleased with virtually no regulation and get away with it. He fails to realize that "the customer is always right" and therefore he and his pals at AT&T just do not get it. Why shouldn't AT&T be hailed as a bad guy when they have offered MMS service for several years with virtually any phone capable but Apple makes a user friendly device and its patrons want to use the functionality of the device and AT&T can not get their act together until later this summer. Shame on them. AT&T's network is marginal at best, I live in a college town with decent coverage for EDGE but it is EDGE, in the more rural areas that surround were I live i see NO SERVICE quite often. I knew this going into buy the iPhone 3G and love the phone so I put up with the poor network, and also upgraded to the 3G S the day it became available. AT&T was suppose to roll out 3G by this fall when I got my first 3G but now they are blaming the poor economy and are now saying they do not know when they will be rolling out 3G in my area. The only thing "Craig Moffett" got correct in his analysis is that if AT&T does not get their S*^T together I will gladly pay a contract cancellation fee and leave for another carrier with a more robust network

So this wonderful, revolutionary phone that is the first I've owned where I've had not a single problem, dropped call or wanted to throw at a wall is wrecking the industry?

Sounds like Craig Moffett is a big baby that needs mommy to give his biddy back before he throws a tantrum.

Quite. As usual it is a matter of perception. And very often that perception inexplicably falls into a well worn pattern of supporting the status quo. The media report that workers strike for more money - higher pay - for instance. And often the public get pissed off with the strikers because they themselves are affected in one way or the other. Rarely does the media portray the strikers as striking for a decent living wage. The assumption usually is that the workers are greedy, not the paymasters. I am not saying the workers are always right but it always strikes me that the reporting automatically tends to slanted in support of the status quo.
So is it Apple wrecking the phone industry or is the industry wrecking itself? Did file sharing and Apple destroy the music industry or did the music industry run itself in to the ground (as much as this really is the case)?

Hello!? This analyst is at least a couple of years behind: There were literally dozens of AI posters who said exactly the same thing when iPhone 2G came out in June 2007.

Yawn.

You're making Bambi cry.

EDIT:

Please don't quote offensive language.

Being a standard and being implemented are two very different things. First of all, Verizon cant just flip a switch. Secondly, this needs to be tested and planned so its not going to magically be in place in under a year for the entire country. Then you have to consider that when LTE is well saturated there will still Verizons CDMA and CDMA2000 networks, which the iPhone doesnt support. Lets assume that the next iPhone supports GSM, CDMA, WCDMA, CDMA2000 and LTE all on the same chip. Who makes this chip? When will Apple get this chip to test? How much will it be? How large will it be? How power hungry will it be?

Even more pressing is the fact the normal radio development has not yet occurred for LTE. There are no LTE USB or EC/34 cards for notebooks that Ive read about. These are products that are not constrained in the same way by size and power usage like thin mobile phones. Where is are the other mobile vendors using or announcing their future use of these products? If youve read something please post a link.

Finally, LTE is not the next step, faster WCDMA is. We now only have 7.2Mbps downlink and 384Kbps uplink on the iPhone. We still dont have HSUPA in the iPhone despite my notebook USB card having a 14.4Mbps and 2Mbps HSUPA for about 2 years now. Then there is even faster HSUPA and then Evolved HSPA which no carrier can yet support. Verizons bolstering of supporting LTE and the mention of the iPhone was just a clever vapornet ruse to stop potential deserters from jumping to AT&T for the iPhone.

Thanks for explaining the differences and pointing out that there is still a long way to go from an investment point of view to get this right.

"At times, though, it also has the caustic effect of suggesting an conspiracy at the carrier to limit useful services, such as voice over IP calls, when cost or technical reasons are the real motivators."

Hmmm, so that's why the rest of the world has MMS and Tethering? In Hong Kong we have tethering for free too!

Cell phone companies brought this on themselves with all these complicated, long contracts that are barely-legal scams, prices that change from invoice to invoice, and shoddy, crappy customer service. The CEOs of these badly-run companies are making hundreds of millions of dollars. They can never sell enough services to pay their overpaid lazy executives and so they force all kinds of charges and fees on their customers. On top of all this, we find out they've also been feeding our private conversations directly to the US Government spy agencies.

I wish we could go back to the days when there was real competition among phone companies, and with 2 phone calls you could cancel your current carrier and move to a new one with no stupid "cancellation" fees, which are purely meant to stifle competition in the marketplace. Since then, the cost of mobile plans has skyrocketed while service has decreased.

AT&T and others got themselves into this mess, and, like the RIAA, it appears they plan to just keep doing the same bullshit instead of innovating and improving their service. Eventually they will make themselves obsolete unless they adapt and change to meet the demands of the 21st Century.

I thought I paid my monthly bill and plan costs to AT&T, not Apple.

I love how people (pertaining to the iPhone) call it the "Apple tax" when once I walk out the door with the phone, Apple no longer gets my money (apart from the iTunes store, of course).

If Apple has wrecked the cell phone business then they have done so by doing what the cell phone industry refuses to do ..... listen to it's customers. Let the wrecking continue !

with no media phones at all.. isn't change just awful.. gosh, here we had an industry sitting on its arse with a bunch of the most useless innovations called cell phones for years.. and when something comes along that makes EVERYTHING else obsolete in a heart beat..

this analzit gets upset and whines to.. to who?..

Just who or what should change the industry if it isn't innovation? The analzit who wakes up one day out of touch as this guy obviously is.. or the consumer and feature phone innovators on or created new demand?

As for ATT.. the last time i looked their dividend was around 9%.. Now, if they can afford to finance their own innovations (keeping up with the hardware) and pay that dividend do you think this analzit has anything really important to say?

Well, a recognition party might be a good idea.. to affirm that innovative change RULES!!

What he is whining about is that more innovation or features for less $... more for less more for less... that is how consumer electronics companies thrive.. Dick Schultz didn't invent Best Buy before the industry filled up the big box stores he started.. He was forward looking and embraced the changes going on around him.. If ATT can't keep up someone else will step in.. and Apple will expand to more distribution.. it is natural selection at its best..

What he is speaking about is simply out of touch with retail.. or consumer electronics.. or looking forward instead of backwards.. Since when should the consumer want to pay more for more? or less for less? The idea is that the consumer will migrate to more features for the same.. (and bitch bitch bitch) or ideally to more features for less.. and then still bitch bitch bitch..

The consumer rules!

What these statements really mean is that change has so dramatically obstructed how this fellow sees things.. that he has nothing left to do but to get out of the way.. since he has just not been able to see what the future is - he has not been able to keep up.. Just how would he have managed the change of the past three years i wonder? Would ATT invent the Iphone instead of Apple.. would that have made him happy.. like would the record companies invent the ipod instead of Apple? .. and now he is stuck in the past calling "what is" counter productive or destructive rather than rational and logical.. After all is said .. Apple didn't talk anyone into anything they didn't want to do.. ATT took a chance and a bite out of the Apple... Anyone who says that has been detrimental to their bottom line is simply.. OUT OF TOUCH ..

Who paid this "researcher"? This was the biggest load of crap I've seen in a long time...

att is rolling out its new network and a lot of its 3g is also being updated to 800MHz frequency range. VZW is too, this is gonna change the whole scene. as both are higher frequencies now, and ATT being higher than VZW for the most part.

Put ATT and VZW all at sub 1 GHz, I guarantee, you will see coverage like never before on both networks, particularly inside buildings and such.

They have these things (less the roaming. be realistic here) they are called European operators. I have an all you can eat data plan. PERIOD. All data, all the time...15 a month. 3.2 kb/s with a phone, and 7.2 kb/s if you buy a data modem from the operator. American carriers are screwing over their own base.

Now that Verizon will allow all of its phones to have WiFi, that brings it one step closer to agreement with Apple. But they are still far apart on other agreements.

The MMS Apple is using on the iPhone is a specific 3G only variant. Not all carriers yet use it.
Covering Hong Kong with tethering is like covering the New York metropolitan area. If that's all AT&T had to cover it would be much simpler than covering the entire United States. If all of China has free tethering then you would be saying something.

Apple is not forcing customers to take $30 data plans and Apple does not get a kick back. They used to with the original iPhone. Now AT&T pays apple the subsidy up front. AT&T recoups over the 2 years mostly from the $30/mo data plan.

If US carriers only had to cover the equivalent area of Finland, that would be like covering the state of New Mexico.

I use Finland because this is where I currently am. Remove Finland, insert EUROPE then continue to have the operators screw you over.

Exactly. Apple is raping customers indirectly through the data plan sham.

One must assume, despite the article's tone, that the author understands deep down that Apple has "wrecked" the cellular industry in the best possible way. All U.S. cellular providers gouge their customers and maintain a totally excessive degree of control. This has to change. All U.S. cellular networks are underpowered compared to many other parts of the world. This has to change.

AT&T, as many others point out, totally deserves to be cast as the villain in the iPhone drama. They most definitely oversold the capacity of their network and are denying essential features to their iPhone customers to conceal the fact that their existing network simply can't keep up with the iPhone--or rather, can't keep up with iPhone owners' demand for bandwidth as more and more people discover what you can do with this amazing device. It's a whole new ball game, and nobody likes it except Apple and their millions of iPhone customers. The best way to maximize profits is to change as little as possible for as long as possible, and the cellular industry has been getting away with almost total stagnation for far too long. Apple's iPhone is standing everybody on their heads, which is exactly how it should be. Maybe they'll actually come up with a few good ideas of their own if they increase the blood flow to their brains!

While I understand that you are referring to the quote you cited above, I would have to say that you are quite delusional to think that there isn't an "Apple Tax" on the iPhone.

Apple continues to make money on you, per the monthly contract that it gets a piece of, for at least 2 years. Maybe longer and we have no idea exactly how much. I would imagine they make more off the lifetime of the contract than they do off the $199/$299 for the device at the store.

So to say that Apple has no place at the table when it comes to plan pricing is just silly!

Are the data plans for the IPhone different than for other cell phone? Does anyone have a chart?

Can you link to any proof of this?

These guys are part of the outmoded form capitalism where the mantra is, "The Most Possible Profit At Any Cost!."

The iPhone unlimited data plan is the standard price for all AT&T smartphones. The difference is that unlimited data is mandatory for the iPhone, while its not for other smartphones.

All the chip design expertise Apple picked up with PA Semi might help a little with that. I'm sure engineers as smart as that know how to shut down parts of chips that aren't active at any given time. Virtually every carrier has announced plans to migrate to LTE. It's just a matter of time, and the laggers will lose ground to the leaders who adopt first.

Do you have a source for this protectionism regarding Motorola?


They're important subscribers, but somehow, I highly doubt half of ATT's money comes from iPhone subscribers.


Silly. That was almost a pure cost shift so the customer can pay less up front but pay more in the long term. As stupid as it is, that's the way it is because there are so many customers like that. Also, the service speed was much faster if you can use 3G.


You know, a $10 Logitech mouse works just fine, I bought a couple from Newegg for that price a few days ago. Why are you so worried about the price of an Apple branded mouse?

Also, It would be nice if you didn't use so much profanity.


? The Disney of that era was a different company.


I don't think a phone can wreck an industry. Maybe wreck the status quo or a business model.

The US cellular industry has been behaving like an oligopoly in some ways, if iPhone really is disrupting their status quo in a way they don't like, then I don't see the problem.


It would probably help, but for buildings with metal siding or lots of other metal obstructions, the best solution is probably still installing cellular repeaters. One worked wonders for me.

Proof of what.

AT&T is subsidizing the iPhone on top of the $199/$299 that people pay for at the register. If you are unsure of this contact AT&T or buy an iPhone outright. $699 or some such price.

What Apple makes per the contract, or per subsidy, is of course a matter of speculation. Which is why I typed " I imagine" vs. "here is the link to the yet unpublished, highly confidential AT&T/Apple iPhone contract".

Yes AT&T does subsidize the initial cost of the phone the way every mobile carrier around the world does. We know the unlocked iPhone costs $500/$700, which means AT&T is paying $300 subsidy.

You implied that Apple involved in revenue sharing and has the leverage to determine AT&T pricing. Apple has said they do not set AT&T service costs and AT&T has said they no longer share revenue. If you don't believe this true, I'm asking for proof.

"Baloney" to this whole article. No one who wants an iPhone is going to let a few remaining issues get in their way. I went to an Apple Store just yesterday, and people are STILL LINING UP to buy the iPhone. Incredible! Fifteen minutes before the store opened, there were no less than 10 people wanting to purchase... that's staying power.

Also, the overly dramatic "wrecking" the industry nonsense is just that. Hype.

I've seen no European tariff that allows you to freely roam all over Europe at a low cost.

Raping? Just like we are all being water boarded by Cisco, and having our nails pulled out slowly by the telcos? Yeah... you're right, life really sucks. Its torture, really.

Within minutes of this news article appearing >> 13 apps were created to help the iphone destroy the rest of the telecoms.

9

I think it would be nice to have an unlocked phone so that interested subscribers could buy and use them at will. Unfortunately, the average person would balk at paying the $500-700 price... even the carrier offered a less expensive data plan. It is those subsidies that allow Apple to rake in the $moolah.

Anyway, LTE is not going to be a quickie for implementation. It will need an upgrade of the backbone to hi speed fiber including passive fiber switches, IP routers, etc. The transmission patters of this Orthogonal tech are different than either UMTS/WCDMA and CDMA/EVDO, so the tower spacing, sectors. cell size will have to be optimized. This will be what I call truck load and crane upgrades. The mobile phone chips are no easy challenge... including proper power control and optimization. The CPU and other functions of the iPhone will have to upgraded to handle the large data speeds without draining the batteries.... which has been a problem for current UMTS/WCDMA/3G.

Carriers love to promise an early deployment, but it rarely happens quickly. The song and dance about UMTS/WCDMA started in the last decade and it was a slow painful process. Not to mention the knock down drag out lawsuits between the various parties like QCOM, Ericsson, Nokia, Broadcom, Texas Instruments, etc about Intellectual property rights, etc. Overall, any kind of new tech is a bottomless pit for money.

The bird in hand for ATT and Apple is to upgrade the current network with hi speed fiber, routers, and HSPA. The phone itself would benefit from the increasing processing and power optimizing. Hopefully OLED once it becomes cheap may help. Higher battery capacity tech would be a plus.

Before iPhone, telcos dictated what features cells phones they sold would offer, based on the telco's capablities and subject to the telco's pricing. Apple determines the iphone's features limited only by ATT's capability, and can offer new funtionality in software. To compete with iPhone, telcos now must provide much more features and data bandwidth than they did previously, and charge less for it.

iPhone isn't wreaking the cell business, but is forcing it to evolve much faster and wring less profit from lesser phones than before. Smartphone sales are booming while sales of less capable handsets are leveling off or declining.

AT&T's data pricing for the 3Gs is still less than competitors with crappier browsers.

No motherf-ing way.
Verizon is the worst ever. Great cell service, terrible everything else. They blindside you for every charge imaginable (and they have huge imaginations.)

Can't say I've ever heard that though Apple did save the consumer from the continuous line of crappy phones by cell manufacturers and has gotten companies off their butts as far as advancing their offerings.

Verizon said no and Cingular said YES. It's as simple as that.
Cingular took a leap of faith and agreed to work with Apple regardless of Apple's demands.
Had the iPhone failed no carrier would be whining about the exclusive deal. AT&T deserves to enjoy the fruits of Cingular's risk.

I have been with AT&T for over a decade. (AT&T -> Cingular -> at&t) They are one of the best, no nonsense carriers out there. They think very carefully before implementing new technologies. They are actually the most practical partner for Apple. They are nation wide & they use GSM