Thursday, September 30, 2010

Article: The Carrier's Rebellion

If you are interested in smart phones -- or more accurately, if you are interested in the marketing of smart phones, read this blog article, The Carrier's Rebellion, by the

This is an insightful and well-written article

by Jean-Louis Gassée

"Before the Steve Jobs hypnosis session, AT&T ruled. 

Handsets, their prices, branding, applications, contractual terms, content sales…AT&T decided everything and made pennies on each bit that flowed through its network.  --Then the Great Mesmerizer swept the table. 

Apple provided the hardware, the operating system, and “everything else”: applications, music, ringtones, movies, books… The iTunes cash register rang and AT&T didn’t make a red cent on content.

"In the eyes of other carriers, AT&T sold its birthright. But they didn’t sell cheap. The industry-wide ARPU (Average Revenue Per User per month) is a little more than $50. AT&T’s iPhone ARPU hovers above $100. Subtract $25 kicked back to Apple, and AT&T still wins. More important, AT&T’s iPhone exclusivity in the US “stole” millions of subscribers from rivals Verizon, Sprint, and T-Mobile—more than 1 million per quarter since the iPhone came out in June, 2007.

The article continues with:
To the industry at large, the damage had been done. Jobs disintermediated carriers. 

Consumers woke up to a different life, one where the carrier supplied the pipe and nothing else. Yesterday’s smartphones became today’s mobile personal computers and carriers devolved into wireless ISPs, their worst fear.

Enter Android....
Full article here:

Also of interest: This financial link

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