Cellphone vendors could exit business if economy remains bleak - Page 7

Tech forum moderator is the ultimate geek. We aren't the general population.

No, it's most definitely not. The kernel is not the OS. Darwin is the base OS. Then Apple builds plenty more on top of that.

You can easily scale a system down, as Apple has done to OS X for the iPhone, by removing all the things the device doesn't need.

But going the other way is almost impossible. If the structure of the OS isn't designed to be scaled up that much, which the phone OS's aren't, it simply can't be done.

As they attempt to add API's at random, the OS becomes a mess, as Symbian currently is. It becomes increasingly unreliable, and "cranky".

This is why Nokia is basing its netbooks on a Linux derived OS rather than Symbian, They know it won't work.

I said not entirely true.

But the general populace does buy compact flour. bulbs for the reasons I gave. At least, that's what the surveys, and articles in places such as Consumer Reports show.

Scaling down the Mac OS X for the iphone was difficult and time consuming --- so much so that Leopard was delayed.

And the point is, what?

I'm not saying it's easy. After all, they also have to write new API's, as well as design an entirely new GUI, etc. The hardware is also different. An entirely new chip and capabilities.

The fact that ir was done shows that it can be done.

But where are the other Old phone OS's?

Dying off slowly.

Now that work is done, finished.

You keep sliding the point of the conversation without directly addressing the previous point.

Verizon turned down the iPhone before they really understood what they were turning down. They definitely would not turn it down today.

My previous point is that Vodafone did want they original iPhone because they did understand what it was and what it could do for them. Which is why they do sell it now.

Yes exactly, mobile Safari is the direct interface, and is where the internet is used. The bandwidth is the road that the information travels on. While its always better to have a faster road. The road isn't the part that is directly used.



Their are still over 6 million 2.5G iPhones in the world. I see people happily using them every day.

I disagree.

The main objection that Verizon has stated publicly is that the iphone deal hurts Verizon's distribution partners --- be it independent third party agents or large partners like circuit city. And we still face this problem with all the recent talk about whether walmart is selling the iphone or not.

It's not like the iphone is hurting Verizon's net adds.

In the beginning, only Apple and AT&T were selling iPhones, but now, that's changed. The same thing would have been true for Verizon. I don't think that was a major reason.


You don't know that. The reports on that disagree. Over 40% of AT&T's iPhone pickups are from other carriers. The estimates have been saying that most are from Verizon, then T-Mobile, and lastly, from Sprint.

When small independent 3rd party AT&T agents can't sell the iphone --- what do they do? They badmouthed the iphone and then attempts to sell you a blackberry which they have in stock.

The last distribution partner that left Verizon was RadioShack --- and see how that turned out. RadioShack's stock crashed, CEO resigned for fudging his resume, had to close 700 stores nationwide.... You take care of your distribution partners and they take care of you.

Verizon has beaten AT&T basically every quarter in retail net adds since the first generation of iphone was launched. It's public record in their SEC filings. No need to read "estimates".

What does that have to do with anything? No company can sell something they're out of. Are you saying that it was a mistake for AT&T to agree to have the iPhone because of some minor thing such as that? AT&T wants the iPhone to be sold everywhere. That opposes what you just said.

Here, read this:
http://www.macblogz.com/2008/12/14/a...-distribution/


Oh please! Radio Shack has so many problems because of changing markets and customer desires that moving from Verizon had nothing to do with it. Radio Shack has been having problems for years.


That means nothing. Their adds have dropped, and that of AT&T has risen since the iPhone's debut.

I guarantee you. Once AT&T contract is up and Verizon is launching its LTE network. Verizon will jockey for the iPhone. They would be stupid not to.

No I am not saying it was a mistake on AT&T's part. I am saying that Verizon made that disclosure BEFORE the original iphone was launched. A lot of people stated at the time that it was just sour grapes for Verizon to say that.

Guess what --- this distribution issue turned out to be a genuine business issue. Whether you agree with Verizon about the importance of protecting their distribution partners --- that's another thing.

That means everything. Verizon has maintained its profit margin and net adds have remained stable. AT&T had to issue a profit warning in order to buy market share.


The original iphone deal that Verizon rejected is so much different than what the 3G iphone deal is now --- revenue sharing, no handset subsidy, no carrier tech support... Of course, Verizon is going to the negotiating table --- it would be stupid for Verizon not to go to the negotiating table.

If you look at the international 3G iphone deals --- no revenue sharing, a few carriers are doing tech support instead of Apple, handset susbidy at the discretion of the carriers...

I was skeptical of your claim, but it turns out a Verizon VP did say that distribution was an issue. It wasn't the only issue. I don't think a lot of people noticed the distribution, most of the derivative stories focused on other things in the story. It looks like USA Today did the original story:

http://www.usatoday.com/tech/news/20...tm?POE=TECISVA

The distribution issue may be an issue with them, but it doesn't meant it's a real business issue. It's not one that makes sense to me, nor, apparently, to AT&T, which is, by the way doing VERY well in wireless. It's the landline business that's having problems and is responsible for any margin shrinkage.

http://www.att.com/gen/press-room?pi...rticleid=26227


But you see, I pointed out that the original distribution plans had changed. It no doubt would have changed had Verizon taken it up instead.

It wasn't the main issue. Apple's meddling with the customer was more important. No company likes that, and Verizon is pretty arrogant too. Apple's not the only one. AT&T had more foresight than did Verizon.

It's worked out pretty well.

What makes the point even more important was the timing of the original interview --- late January 2007. It was 2 weeks after Steve Jobs' keynote speech, no detail about distribution was ever announced at the keynote and the launch was still 5 months away.

It was no sour grapes.

It is a legitimate business issue --- whether you would value this issue as highly as Verizon had valued, that's a different matter. Another issue stated in that article was the consumer support issue --- which also turned out to be legitimate because several carriers worldwide are doing tech support for the iphone instead of Apple.

They had to make a $900 million charge for the iphone subsidy --- that affects the profit margin. Don't forget that every landline company ---- including Verizon --- are losing customers, so I don't accept your argument about it being landline.

No, the deal would not have changed had Verizon taken it up. What Apple needed to see was a massive failure of the original business plans --- price drop within 100 days, more than half of their iphones were exported to China and Russia, European carriers were stuck with excessive 2G iphone inventory, and carriers left and right were balking at the negotiating table for the 3G iphone....


It doesn't have to make sense to you. Like it or not, Verizon Wireless is the best run wireless carrier in the US, with the best network, with the highest ARPU, with the highest data ARPU, with the best profit margin, with the best churn rate.... --- if this issue is important to Verizon, who are we to question their judgement.

It's not my argument. It's their own reporting. They lost 2.2% of their landline customers. They have to report all subsidies, as does Verizon, Sprint, etc. If you look, you will find subsidies listed on their balance sheets as well. But, AT&T also told of increased profits because of the iPhone.

http://news.cnet.com/8301-1035_3-10072601-94.html


Now you're making up numbers. More than HALF the phones were exported to China and Russia?

You have to show proof of those numbers.

Also, you don't seem to know about what happened with Apples exports. Which carriers abroad had *2G* phones?


Considering that Apple by far in a better circumstance than is verizon viz a viz their own industry, why would you question any deals THEY make, and any who want to do those deals with them?

However well Verizon is doing, they would be doing better had they made the deal.

This was my original point with which you disagreed, that Verizon would not turn down the iPhone now.

Their would still need to be many issues worked out. Verizon charges extra for many of the iPhones native functions. That would certainly be a point of contention between Apple and Verizon.

Everybody has to report subsidies --- as cost of acquisition. But AT&T is the only carrier that made a special profit warning on the iphone subsidy. I believe concrete SEC filings in numbers and cents rather than a vague PR statement saying thqt their profits have increased due to the iphone.

2 million iphone sold in the US in Q4 2007, AT&T activated 900K. Don't really care what precise number goes to China and Russia --- only care that less than 1/2 of them ended up with AT&T.

What is good for Apple is not necessarily good for AT&T. I would not question Apple's decision of their demands. I only question why you question Verizon's judgement as opposed to AT&T's judgement.

The question is how much are they willing to pay.

AIG may be a financial basketcase, but if I can buy the whole company for a dollar --- I would buy it. Your argument is like that --- just blanket statement saying Verizon would not turn down the iphone now. I would not turn down a deal to buy AIG for a dollar --- a completely useless statement.

Its not a blanket statement. The iPhone and Verizon are a very specific case with some contentious hurdles to cross before they will work with each other.

That's not much of a statement at all then.

They didn't "all but ignore" the CDMA market, Qualcomm had issues with them manufacturing their own CDMA chipset, which led to the lawsuits etc...

Also, even though CDMA is over 50% of the US market, that doesn't make it large in the worldwide market, Qualcomm didn't one anyone coming in and playing in their backyard unless it was under their rules.

How is the purchase of a device to replace a broken device counted? I doubt AT&T will say it is a new activiation

Of course those 5 countries in Europe are just that, individual countries, and the mobile companies in them operate independently, the deals and networks they offer are different between the countries.

It's more like Nokia had issues with buying Qualcomm's CDMA chipsets, so Nokia tried to make their own CDMA chipset --- which sucked in performance. And Nokia never embraced the flip phone form factor --- I would call this Nokia ignoring the American cell phone market in general, not just ignoring the US CDMA market.


If the iphone breaks down so much and so often that requires a significant percentage change in my statistics --- then Apple has more things to worry about.


That has nothing to do with what I said --- I was talking about 3G penetration rate in those countries vs. the US. It is the best and most fair comparison you can ever find.

So if the phone is dropped in water, of dropped by a height and broken, then the user wouldn't get a new one? All phones suffer from the same issue of misuse.


No it isn't. Those countries are individual in their own right, you can not group them together and then try and compare usage levels

Not to a level that is statistically significant --- it's not like how we are looking at each and every ballot in Minnesota and asking whether the voter intent to spoil the ballot by voting for Daffy Duck as senator.

Why not? It's not like California is really the same as Iowa in terms of 3G penetration. In 4 out of the 5 largest countries in Europe, the US beat them in 3G penetration individually. The only country that the US didn't beat is Italy --- but that's more of the issue that Italy has a 150% "fake" mobile penetration rate.

Tell me who do you think having better penetration rate if you count people instead of SIM cards --- US vs. Italy. I would lean on the US penetration rate because 1/2 the population has CDMA phones (which doesn't have SIM cards) and the other 1/2 with GSM phones (having a much higher postpaid contract subscriber proportion than Europe).

Otherwise, you are going to list individual European countries with higher 3G penetration than the US --- but with a population smaller than your NFL stadium (Liechtenstein).

Using your example, California and Iowa are both serviced by the same mobile companies, providing the same plans, and same costs in both States (excluding sales taxes).

Where as in Europe, there can be two mobile companies, both owned by the same company, but both will work independently, and offer different rates in their operating country. Try looking at Vodafone around all the European countries (in fact all over the work). Or O2/Vodafone in Ireland, the rates in North Ireland, are very different than the rates in Ireland.

Costs will affect penetration in different services, in Ireland where mobile data is expensive, you will not see many people using it, but in Finland where it is a lot cheaper to use mobile data, there will be a lot more people using it.

American carriers have local plans as well. AT&T and Verizon operates in different areas for their landlines --- which greatly affects their bundling and pricing. In the US, quad bundling is the business model --- and Verizon doesn't provide FIOS in IOWA.

Do you know that Verizon has more subscribers with a 3G handset than Vodafone has in their entire European operation (even though Vodafone has about twice as many subscribers in Europe than Verizon has in the US).

We aren't talking about landlines, we are talking about mobile plans.


Yes I did, and since Vodafone owns part of Verizon, I am sure they are happy with the fact.

I don't care if you care or not about the landlines --- the consumers do.

Verizon Wireless is strong in the north east and Cingular is strong in the south --- where their corporate parents have their landline operations.

Why do you think that is even relevant to this discussion? Are you deliberately bringing in the tangents?

No, I am not deliberately bringing in the tangents.

I am just responding to jfanning who insist somehow his way of looking at statistic is correct. Statistically it makes no difference if Liechtenstein has a highest rate of 3G penetration in the world --- because they have less than 40,000 people (less than your average NFL stadium).

You mean like Italy? Wow. No.


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Nonsense. You can have the 'very bestest' interface in the world, but at some level of slowness, the user experience is harmed. Remember OS X 10.0? Yargh.

Tell us with a straight face that you'd go back to dial-up on your home computer. That's about how fast GPRS is.



And Apple sold nearly 7 million 3G iPhones in just the 3rd quarter. The 2.5G iPhone couldn't match that in a full year.

Don't kid yourself... it's now a footnote.


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Holy God... Teno and I actually sorta kinda agree on something!

Yeah, this does seem possible, assuming Apple is willing to offer a reasonable deal. The coup de grace was when Apple extended their iPhone exclusive with ATT for another year, due to the new pricing changes/deal. Now VZW can't get their hands on it 'til mid-2010.

By then, LTE will be just around the corner, and Apple may get to lazy-out on making a CDMA model (though they probably still should, not the least for Korea in the short-term. Korea should have a decent amount of 4G in a couple of years, but it's a bit unclear yet if LTE or WiBro/WiMax is going to win over there).

In any case, VZW will certainly make a play for the LTE iPhone. But they won't pay through the nose for it... VZW is similar to Apple in that they're both fairly arrogant companies.


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That's somewhat debatable. Apple was very likely asking for the sun and the moon in their offer to Verizon. ATT was in a weaker position than VZW, and was willing to cough up said sun and moon. VZW wasn't. And, in retrospect, I can't really blame them.

Even with the iPhone, ATT is still only battling VZW to a standstill, pretty much (and a lot of this is due to ATT's strength in prepaid, actually). With the VZW-Alltel merger that will be finalized anytime now, VZW re-gains the title of #1 US carrier... again, without the iPhone. VZW has lost a few customers to the iPhone, but their churn rate hasn't climbed dramatically. Their ARPU is fine. They'd like the iPhone, but they don't truly need it. Though the 3G model's success must be turning their heads more than a bit.

But, if you really think about it, Apple probably needs Verizon more than VZW needs Apple. With the Alltel merger, Verizon will have over 80 million customers, quite a bit more than ATT, and about one-third of the US market. If Apple is willing to cut VZW a more reasonable deal than it offered in the past and get them onboard, Apple's US sales stand to skyrocket, as there are lots of ppl out there who want an iPhone, but like their VZW (and Alltel) service and don't want to switch (or who are on the fence but don't want to pay the ETF, which is quite expensive on multi-line/family plans).

You'd have to think that getting VZW-Alltel onboard is goal one for Apple the instant the ATT exclusive runs out. Because there's just not many alternatives.

Sprint is dysfunctional and shrinking, and is pretty wedded to Wi-Max (I doubt Apple wishes to make a WiMax version of the iPhone). T-Mobile is barely a third of VZW-Alltel's size, and has an extremely limited 3G network (they started deploying it very late). US Cellular is a very good carrier, but they're tiny compared to the big boys. And so on.


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