iPhone, iTouch, iTrojanHorse?
Posted by Bob Warfield on September 13, 2007
Larry Dignan has a fascinating post about goings on in the wireless world. One of the big obstacles to innovation in the wireless world are the carriers themselves. They have a stranglehold on the phones and on the services one can provide with the phones. Unfortunately, they’re also often not the most forward looking organizations.
Enter the iPhone. Dignan is connecting some interesting dots:
1. iPhone has forever changed the world by making attracting hackers in to unlock the phone. Once you do it for one phone, others will be unlocked too. This breaks one aspect of the carrier’s hold on phones. Hacked unlock commoditizes the carriers and makes it hard for them to compete by gaining exclusives on the hot new phones. The implication is that Apple is “crazy like a fox” to allow this to go on. Of course they want it to go on. After selling an unprecedented 1M phones in 2 1/2 months, they’re ready for world domination. Sticking with one carrier won’t cut it.
2. iTouch shows that there is huge value in a device that doesn’t even talk to the telco infrastructure. This is the vision that says you’d rather have WiFi (flavor o’ the day) and VOIP than mess around with cell technology. Once you run Skype on an iTouch-style device, your question becomes whether you can find a WiFi hot spot in as many places as you want to make calls. If it gets good enough, the carriers can get cut out all together, obsoleting their incredibly expensive infrastructure. Of course there are many “carriers” that all want to own this fabric, and some may even contribute to the WiFi scenario.
3. The last dot connected is the 700 MHz spectrum being auctioned by the FCC. It is widely expected that the computer world in the guise of Google, ebay, Apple, (insert favorite computer co such as MSFT here). These guys have a totally different agenda than the existing wireless carriers and could be hugely disruptive to their business models.
I’ve touched on some of these themes before, for example when I said that Jobs was very clever in his strategy and would outthink the phone companies using computer company thinking and meta concepts. By now I think the crowd that said the price cut was a royal screwup and a real sign of weakness have calmed down and seen the light a little better. Creating platforms is different than creating infrastructure. Guys like Jobs get that and the phone companies mostly don’t: they build infrastructure. See my post on ISV’s inheriting the earth for more.
The world is going on the cloud. And I do mean THE cloud, not some cloud, not a telco cloud, but the genuine always there to connect to World Wide Web. Stay tuned!
Song Huang at SoonR has a dissenting view. If he’s right and the carriers do keep up, it’ll be great: we’ll have innovation from both sides and a competitive features war that can only benefit the rest of us. The reality is he will be right for a little while, but we’ll see whether there isn’t a differential in the compound rate of innovation that eventually favors the computer guys. While the carriers have huge installed bases, I certainly haven’t met many people that are very loyal to them.
In my post about the 3G iPhone I talk about how Apple is radically stepping away from some of this vision. In fact, they’ve turned more conventional than ever–more than the original iPhone. Interesting turn of events.