Is iPhone Popular Because US Mobile Phone Carriers Are Calcified?

So you bought an iPhone and finally got the signal. Could the device popularity be due to Apple's great marketing skills in building buzz in the marketplace and with employees? Or could it be because US mobile phone carriers' traditional veto power and design control over every feature of a the phone has been overruled? 

NYT David Pogue [thanks, Bruno] reports a conversation with the Treo team at a recent mobile industry conference by Lake Como:

"I also remember hearing friends on the Palm Treo team tell me what a nightmare it was to sell their early phones to the American carriers, who traditionally wield veto power and design control over every feature of the phone. The Treo team had all kinds of great ideas for improving the design and software of cellphones—but those carriers turned up their noses with a “we know what’s best” attitude."

Do you know what you're missing? I travel to Europe once a year, I am not surprised by the dearth of services available to mobile phone users in the rest of the world. If you travel often, my advice is to buy an unlocked phone in Europe or somewhere else and replace the SIM card in the device with the one you need for that country when you're there.

The story here is how Steve Jobs may have managed to change the phone maker/cell carrier relationship for the first time in years. According to Pogue:

"Stan Sigman, president and chief executive for wireless at AT&T, is on record as saying that he had no idea what Apple’s phone would be like when he agreed to this—a deal that would have been unthinkable in the pre-Jobs era.

If the iPhone becomes a hit, then, it could wind up loosening the carriers’ stranglehold on innovation. Maybe phone makers’ imaginations will at last be unleashed, and a thousand iPhone-like breakthroughs might bloom.

The cellular executives at the conference didn’t seem to oppose this development; indeed, several were thrilled by the shift, as though they’d been feeling just a little uneasy about the whole “we’re-the-gatekeeper” thing themselves. That’s really exciting stuff."

Exciting stuff, indeed. I was recently part of a conversation at Logic + Emotion with Nokia's emerging media pro Karl Long. Given the company's dedication to designing experiences by observing people in their desire to connect, I am not surprised that this is a brand that people love. As I said in my comment there, I waited to upgrade my mobile phone until I could get my hands on the first Nokia flip phone in the US.

Much work remains to be done. If you saw the models Nokia offers in Europe, you would be falling in love with their phone, too. Check out their models in Italy. Which brings me back to the point of this post. Maybe Steve Jobs with his tough requirements just did us a lot of good. Maybe you are not planning to buy an iPhone. And maybe your lengthy activation process didn't make a good impression.

The innovation that this product brought to bear may be much more extensive than just integrated features on one device. It may span a whole industry. And not a moment too soon!

How about a little humor now? Here's The David Letterman Show's iPhone Top10 [thanks, Emanuele].

Enjoy!

Comments

[Stephen Denny]

Carriers have wielded considerable power in most transactions to date -- co-branding being a large part of it. In their effort to homogenize their in-store experience, they've removed the essential point of interest: the brands themselves.

The iPhone seems to be getting very mixed reviews -- "great iPod, lousy phone" seems to sum it up. However, coming off their iTunes/iPod success (and overlooking their Apple TV problem), they had enough leverage to get one carrier to let them do what they wanted.

Does this spell a change in the carriers' ways? Probably not. I can't think why it would.

[Valeria Maltoni]

Stephen:

I disagree with you. I think Apple has a track record of working out the problems in version 1.0 and providing an experience that is worthwhile to mention.

We live in one of the countries where consumers have a big say -- we vote with our wallets, or we should. Signing up with a carrier to have a mobile phone connection so far has been a necessary evil. Wireless customer service is rated worse than insurance claims. And that is low.

Mine is a what if... I remain optimist that consumers and providers of phones can change how things are run. I'd be curious to hear what everyone else is thinking?

[Matt Dickman]

Valeria -- I think Apple has changed the game for wireless manufacturers and carriers in the US. Until this device I dare you to think of the last mobile phone with this much hype. Heck, I dare you to name the last consumer electronics device with this much hype.

Why is it so hyped? Because consumers want it. Plain and simple. Apple has (finally) broken through with a device that combines aesthetics with functionality. More and more copycat devices are on the way. If you were Motorola, wouldn't this be a kick in the ass for you? Would you have your design teams working overtime to try to catch up?

Apple did the same thing with the MP3 market. There had been hundreds of players before the iPod. Some from big names like Sony and others from small upstarts trying to make a name. In the end it was the company that used physical and experience design to win people over. Companies are still trying to jump to Apple's new curve with mixed results.

Like you said, consumers vote with their wallets and I think we know where people are going. Look for more and more copies of the iPhone and look for more device manufacturers to release phones with similar feature sets. It's hard to play catch up btw.

[Valeria Maltoni]

Matt:

I actually hope that Nokia is in hot pursuit not of the features per se... of the design and user experience. You should see their phones in Europe.

One of the reasons why consumers want it is that wireless companies have so far limited the scope of features a phone could have.

[Katie Konrath]

I really love the fact that the iPhone is a disrupter that is changing how American consumers view cell phones. Love it or hate it, it's gotten people talking.

A little while ago on my innovation blog, I wrote a post called "The iPhone is worth its weight in gold for its ability to inspire thinking" about the many questions that the iPhone raises: (http://www.getfreshminds.com/2007/07/the-blogosphere.html)

I think it's really true that the iPhone will be a game-changer. It's shaken up the cell phone industry so much that interesting things are bound to happen!

Very interesting post, by the way, I'm looking forward to reading more of your blog!

[Valeria Maltoni]

Katie:

Thank you for sharing your post with us. I was at an event these past couple of days and I witnessed the love that iPhone users have for the phone. Three of the speakers lined up theirs to take a photo. Each iPhone has been personalized.

I'm keeping my fingers crossed about the wireless companies starting to pay attention -- they should, then again, they built their business empires on the old ways... I am hopeful that phone makers can finally get some traction with the help of consumers.