iPhone and competition

by Volker Weber

I love the iPhone. It's a wonderful user experience and it has changed the way we look at mobile devices.

What I don't like is the heavy-handedness of Apple and the carriers. Apple sells the iPhone through exclusive partnerships with carriers. In any local market, you can only buy the iPhone through one carrier. There is no competition. And without competition the customer is underserved.

All iPhone applications are only available through a single source. The iTunes store. Again, no competition. And yet again, without competition the customer is underserved.

Two examples:

  1. Any 3G phone can be used as an Internet access device for your notebook. Nokia even ships an application on the N97 which transforms your mobile into a wireless access point, providing transparent service to the Internet. Others need to be connected via Bluetooth Personal Area Network, or USB/Bluetooth dialup. So can the iPhone, but the carriers won't let you use it, unless you shell out more money to enable this option. And, in the case of T-Mobile Germany, downgrade you to a newer contract with more restrictions. Instead you can remove your SIM from the iPhone and insert it into any other capable phone, or USB 3G modem, and it works. Without any additional cost. Get more than one SIM on your contract, and you don't even have to remove it. It all works. Just not with the iPhone. Why? There is no competition.
  2. Sling has mobile clients that access your Slingbox at home and let you watch your TV channels, including the pay channels you subscribe to. On all their supported platforms, it works over 3G or Wi-Fi. The iPhone version however is Wi-Fi only. Why? Apple does not approve the 3G version for the iTunes store. It has to be crippled to Wi-Fi only. Since there is no other option to sell the app, Sling has to comply. No competition.
In Europe, we can work around the exclusive carrier deals. There are countries with legislation that forbids the customer lock-in to a single carrier. So we can buy our iPhones within those countries without a carrier lock.

We can also work around the iTunes store limitation with a jailbreak. It's not really an iTunes store competition, but at least you can run some software, that Apple won't let you have.

Does all of this matter to Apple or the carriers? It doesn't. The majority of their customers don't even know about these restrictions. It matters to the software vendors, and it may matter to you and me. But that is not where Apple and the carriers make their money.

I am an iPhone user. But my carrier is a lot more user-friendly than T-Mobile. They have to be, because they have strong competitors.

iphoneo2

Comments

Well, there are 4 (actually 3 plus 1) carriers in Sweden offering the iPhone: Telia (and Telia owned Halebop), Tre and Telenor. Which doesn't make the pricing any better though.

Federico Hernandez, 2009-09-16

It's better in Australia - not only is the iPhone available with all the carriers, you can walk in to the Apple store and purchase a phone outright, unlocked - about €520 for the 16gb 3GS, and €615 for the 32gb 3GS - you are then mostly free to do whatever you want with it, app store and ridiculous opt-in tethering aside (One carrier enables tethering free, another charges, and two don't allow it - even though they actively promote it with other phones).

I must say, the tethering thing is stupid - I understand if carriers want to disallow it, but the fact that it doesn't when you use the phone (legitimately) on a non-iphone carrier - say 3 in the UK really sucks, and there is no way for them or I to enable it.

Lincoln Stoll, 2009-09-16

Even though I'm content living with the limitations of the iPhone ecosystem, I'd like to see good competition to push Apple a little harder.

Sadly, Palm is the only competitor within shouting distance technically, and they look likely to run out of cash before the rough edges can be smoothed off.

David Richardson, 2009-09-16

Absolutely agree with you on the iPhone and oh to be able to use OS X server in VMware ESXi on non-Apple hardware......

Brendon Upson, 2009-09-16

Volker, I've got the same carrier like you. And I like it also. Running a BlackBerry and an iPhone on the same contract at the same time with the same phone number is something the other provides don't do in that easy way.
When I bought my iPhone I called the hotline, asked for the so called data option and tada, I used my iPhone. If I don't need this data option anymore I can release it. Same with the BlackBerry or any other option they offer.
And one of the best things about them is, that they tell me about newer and cheaper pricing models and that they switch my contract within the duration to the new and cheaper level. So I've got always the best conditions. I've never had this with T-Mobile or E-Plus and afaik also Vodafone doesn't do that.

Thomas Lang, 2009-09-16

@Thomas
For me it was no problem to book the BlackBerry Solution Option to the T-Mobile iPhone contract for running a BB and iPhone at the same time.

Peter Seifert, 2009-09-16

With all the competition rules in Europe and the UK I've never understood how they get away with it. Where are the regulators? Perhaps too busy watching Microsoft.

Complete pain in the UK for me.

Steve Castledine, 2009-09-16

absolutely. i long time think about to get the 3Gs in Asia, where it is not so expensive (21,000.00 BHT or 424.23 EUR) - but still jail-break-unlock patched. Which means every time a new release comes, you have to be working for that thing which should normally work for you.

Last, i get it from a friend travelling from italy. Price for the 32GB version was 750 EUR (37,500.00 BHT or 1550.00 SGD)

The benefit is clear:

- tethering is working
- updates no problem at all
- finally freedom of use

So thanks to the regulatory ministry in some european countries. And (from my point of view) never again a Provider depending, locked iPhone (had the 2g Release from t-mob before).

ingo Harpel, 2009-09-16

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I explain difficult concepts in simple ways. For free, and for money. Clue procurement and bullshit detection.

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